ENCOMPASS HEALTH CORP, 10-K filed on 2/28/2025
Annual Report
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Cover Page - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2024
Feb. 13, 2025
Jun. 30, 2024
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2024    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-10315    
Entity Registrant Name Encompass Health Corporation    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 63-0860407    
Entity Address, Address Line One 9001 Liberty Parkway    
Entity Address, City or Town Birmingham    
Entity Address, State or Province AL    
Entity Address, Postal Zip Code 35242    
City Area Code 205    
Local Phone Number 967-7116    
Title of 12(b) Security Common Stock, $0.01 par value    
Trading Symbol EHC    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Emerging Growth Company false    
Entity Small Business false    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction false    
Entity Shell Company false    
Entity Public Float     $ 8.5
Entity Common Stock, Shares Outstanding   100,709,106  
Documents Incorporated by Reference
The definitive proxy statement relating to the registrant’s 2025 annual meeting of stockholders is incorporated by reference in Part III to the extent described therein.
    
Entity Central Index Key 0000785161    
Document Fiscal Year Focus 2024    
Document Fiscal Period Focus FY    
Amendment Flag false    
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Audit Information
 12 Months Ended
Dec. 31, 2024
Audit Information [Abstract]  
Auditor Firm ID 238
Auditor Name PricewaterhouseCoopers LLP
Auditor Location Birmingham, Alabama
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Consolidated Statements of Comprehensive Income - USD ($)
shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Income Statement [Abstract]      
Net operating revenues $ 5,373.2 $ 4,801.2 $ 4,348.6
Operating expenses:      
Salaries and benefits 2,901.0 2,600.1 2,393.3
Other operating expenses 802.6 719.1 670.4
Occupancy costs 57.3 56.3 54.7
Supplies 239.0 218.3 202.1
General and administrative expenses 209.2 201.7 154.3
Depreciation and amortization 299.6 273.9 243.6
Total operating expenses 4,508.7 4,069.4 3,718.4
Loss on early extinguishment of debt 0.6 0.0 1.4
Interest expense and amortization of debt discounts and fees 137.4 143.5 175.7
Other (income) expense (20.1) (15.7) 5.2
Equity in net income of nonconsolidated affiliates (3.0) (3.2) (2.9)
Income from continuing operations before income tax expense 749.6 607.2 450.8
Provision for income tax expense 150.2 132.2 100.1
Income from continuing operations 599.4 475.0 350.7
(Loss) income from discontinued operations, net of tax (2.8) (12.0) 15.2
Net and comprehensive income 596.6 463.0 365.9
Net and comprehensive income 596.6 463.0 365.9
Less: Net income attributable to noncontrolling interests included in continuing operations (140.9) (111.0) (93.6)
Less: Net income attributable to noncontrolling interests included in discontinued operations 0.0 0.0 (1.3)
Less: Net and comprehensive income attributable to noncontrolling interests (140.9) (111.0) (94.9)
Less: Net and comprehensive income attributable to noncontrolling interests (140.9) (111.0) (94.9)
Net income attributable to Encompass Health 455.7 352.0 271.0
Comprehensive income attributable to Encompass Health $ 455.7 $ 352.0 $ 271.0
Weighted average common shares outstanding:      
Basic (in shares) 99.9 99.5 99.2
Diluted (in shares) 102.2 101.3 100.4
Basic earnings per share attributable to Encompass Health common shareholders:      
Continuing operations (in dollars per share) $ 4.56 $ 3.63 $ 2.58
Discontinued operations (in dollars per share) (0.03) (0.12) 0.14
Net income (in dollars per share) 4.53 3.51 2.72
Diluted earnings per share attributable to Encompass Health common shareholders:      
Continuing operations (in dollars per share) 4.49 3.59 2.56
Discontinued operations (in dollars per share) (0.03) (0.12) 0.14
Net income (in dollars per share) $ 4.46 $ 3.47 $ 2.70
Amounts attributable to Encompass Health:      
Income from continuing operations $ 458.5 $ 364.0 $ 257.1
(Loss) income from discontinued operations, net of tax (2.8) (12.0) 13.9
Net income attributable to Encompass Health $ 455.7 $ 352.0 $ 271.0
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Consolidated Balance Sheets - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 85.4 $ 69.1
Restricted cash 37.7 35.1
Accounts receivable 598.8 611.6
Prepaid expenses 42.3 34.5
Other current assets 122.7 91.5
Total current assets 886.9 841.8
Property and equipment, net 3,643.1 3,301.0
Operating lease right-of-use assets 203.7 208.5
Goodwill 1,284.0 1,281.3
Intangible assets, net 297.8 278.2
Other long-term assets 219.2 191.6
Total assets [1] 6,534.7 6,102.4
Current liabilities:    
Current portion of long-term debt 138.6 24.8
Current operating lease liabilities 26.3 24.1
Accounts payable 171.0 170.0
Accrued payroll 227.9 207.5
Accrued interest payable 38.6 42.6
Other current liabilities 238.6 187.4
Total current liabilities 841.0 656.4
Long-term debt, net of current portion 2,359.2 2,687.8
Long-term operating lease liabilities 189.7 196.1
Self-insured risks 138.6 131.8
Deferred income tax liabilities 105.2 87.0
Other long-term liabilities 51.8 46.1
Total liabilities [1] 3,685.5 3,805.2
Commitments and contingencies
Redeemable noncontrolling interests 56.5 42.0
Encompass Health shareholders’ equity:    
Common stock, $.01 par value; 200,000,000 shares authorized; issued: 116,036,500 in 2024; 115,416,676 in 2023 1.2 1.2
Capital in excess of par value 1,847.0 1,787.0
Accumulated income 796.7 406.5
Treasury stock, at cost (15,261,136 shares in 2024 and 15,163,909 shares in 2023) (577.9) (547.2)
Total Encompass Health shareholders’ equity 2,067.0 1,647.5
Noncontrolling interests 725.7 607.7
Total shareholders’ equity 2,792.7 2,255.2
Total liabilities and shareholders’ equity [1] $ 6,534.7 $ 6,102.4
[1] Our consolidated assets as of December 31, 2024 and December 31, 2023 include total assets of variable interest entities of $208.1 million and $207.7 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $45.0 million and $42.2 million, respectively. See Note 3, Variable Interest Entities.
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Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 200,000,000 200,000,000
Common stock, shares issued (in shares) 116,036,500 115,416,676
Treasury stock, shares (in shares) 15,261,136 15,163,909
Total assets [1] $ 6,534.7 $ 6,102.4
Total liabilities [1] 3,685.5 3,805.2
Variable Interest Entity, Primary Beneficiary    
Total assets 208.1 207.7
Total liabilities $ 45.0 $ 42.2
[1] Our consolidated assets as of December 31, 2024 and December 31, 2023 include total assets of variable interest entities of $208.1 million and $207.7 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $45.0 million and $42.2 million, respectively. See Note 3, Variable Interest Entities.
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Consolidated Statements of Shareholders' Equity - USD ($)
shares in Millions, $ in Millions
Total
Common Stock
Capital in Excess of Par Value
Accumulated Income
Treasury Stock
Noncontrolling Interests
Balance at beginning of period (shares) at Dec. 31, 2021   99.5        
Balance at beginning of period at Dec. 31, 2021 $ 2,357.0 $ 1.1 $ 2,289.6 $ 141.8 $ (521.2) $ 445.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 358.7     271.0   87.7
Receipt of treasury stock (shares)   (0.1)        
Receipt of treasury stock (7.7)       (7.7)  
Dividends declared (86.3)   (11.1) (75.2)    
Stock-based compensation 31.7   31.7      
Distributions declared (99.5)         (99.5)
Capital contributions from consolidated affiliates 100.1         100.1
Spin off of Enhabit, Inc. (846.0)   (595.7) (221.9)   (28.4)
Other (shares)   0.4        
Other 18.3   15.7   (7.8) 10.4
Balance at end of period (shares) at Dec. 31, 2022   99.8        
Balance at end of period at Dec. 31, 2022 1,826.3 $ 1.1 1,730.2 115.7 (536.7) 516.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 454.7     352.0   102.7
Receipt of treasury stock (shares)   (0.1)        
Receipt of treasury stock (8.2)       (8.2)  
Dividends declared (60.7)   0.5 (61.2)    
Stock-based compensation 50.6   50.6      
Distributions declared (110.0)         (110.0)
Capital contributions from consolidated affiliates 100.5         100.5
Other (shares)   0.6        
Other 2.0 $ 0.1 5.7   (2.3) (1.5)
Balance at end of period (shares) at Dec. 31, 2023   100.3        
Balance at end of period at Dec. 31, 2023 2,255.2 $ 1.2 1,787.0 406.5 (547.2) 607.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 591.5     455.7   135.8
Receipt of treasury stock (shares)   (0.2)        
Receipt of treasury stock (12.1)       (12.1)  
Dividends declared (65.1)   0.4 (65.5)    
Stock-based compensation 48.3   48.3      
Distributions declared (121.3)         (121.3)
Repurchases of common stock in open market (in shares)   (0.4)        
Repurchases of common stock in open market (31.1)       (31.1)  
Capital contributions from consolidated affiliates 134.2         134.2
Contribution of our hospital to consolidated joint venture (7.6)   23.2     (30.8)
Other (shares)   1.1        
Other 0.7   (11.9)   12.5 0.1
Balance at end of period (shares) at Dec. 31, 2024   100.8        
Balance at end of period at Dec. 31, 2024 $ 2,792.7 $ 1.2 $ 1,847.0 $ 796.7 $ (577.9) $ 725.7
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Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares
 3 Months Ended 12 Months Ended 25 Months Ended 37 Months Ended
Sep. 30, 2024
Sep. 30, 2022
Sep. 30, 2019
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Jul. 31, 2024
Jul. 31, 2022
Statement of Stockholders' Equity [Abstract]                
Dividends declared on common stock (in dollars per share) $ 0.17 $ 0.15 $ 0.28 $ 0.64 $ 0.60 $ 0.86 $ 0.15 $ 0.28
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Consolidated Statements of Cash Flows - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Cash flows from operating activities:      
Net income $ 596.6 $ 463.0 $ 365.9
Loss (income) from discontinued operations, net of tax 2.8 12.0 (15.2)
Adjustments to reconcile net income to net cash provided by operating activities —      
Depreciation and amortization 299.6 273.9 243.6
Amortization of debt-related items 9.7 9.5 9.7
Loss on early extinguishment of debt 0.6 0.0 1.4
Equity in net income of nonconsolidated affiliates (3.0) (3.2) (2.9)
Distributions from nonconsolidated affiliates 4.0 1.6 4.0
Stock-based compensation 48.3 50.6 29.2
Deferred tax expense 10.7 3.9 27.9
Other, net 14.7 5.2 20.3
Changes in assets and liabilities, net of acquisitions —      
Accounts receivable 3.0 (22.4) (16.9)
Prepaid expenses and other assets (57.3) 6.1 8.0
Accounts payable 3.0 11.8 2.3
Accrued payroll 20.4 39.2 (31.2)
Other liabilities 52.8 15.6 7.4
Net cash (used in) provided by operating activities of discontinued operations (3.1) (16.0) 52.3
Total adjustments 403.4 375.8 355.1
Net cash provided by operating activities 1,002.8 850.8 705.8
Cash flows from investing activities:      
Purchases of property, equipment, and intangible assets (642.5) (583.1) (584.1)
Proceeds from sale of restricted investments 18.9 7.4 0.0
Purchases of restricted investments (22.5) (23.0) (35.2)
Other, net (7.2) (4.1) (4.2)
Net cash used in investing activities of discontinued operations 0.0 0.0 (3.5)
Net cash used in investing activities (653.3) (602.8) (627.0)
Cash flows from financing activities:      
Principal payments on debt, including pre-payments (255.2) (7.2) (345.8)
Principal borrowings on notes 15.0 20.0 11.8
Borrowings on revolving credit facility 80.0 60.0 240.0
Payments on revolving credit facility (60.0) (115.0) (385.0)
Principal payments under finance lease obligations (21.8) (41.1) (19.2)
Debt amendment and issuance costs (0.1) (0.1) (24.1)
Repurchases of common stock, including fees and expenses (31.1) 0.0 0.0
Dividends paid on common stock (62.8) (60.4) (99.0)
Distributions paid to noncontrolling interests of consolidated affiliates (125.0) (114.7) (96.6)
Taxes paid on behalf of employees for shares withheld (12.1) (8.2) (7.3)
Contributions from noncontrolling interests of consolidated affiliates 140.4 68.3 64.1
Other, net 2.1 1.2 0.3
Net cash provided by financing activities of discontinued operations 0.0 0.0 515.1
Net cash used in financing activities (330.6) (197.2) (145.7)
Increase (decrease) in cash, cash equivalents, and restricted cash 18.9 50.8 (66.9)
Cash, cash equivalents, and restricted cash at beginning of year 104.2 53.4 120.3
Cash, cash equivalents, and restricted cash at end of year 123.1 104.2 53.4
Reconciliation of Cash, Cash Equivalents, and Restricted Cash      
Cash and cash equivalents at beginning of period 69.1 21.8 49.4
Restricted cash at beginning of period 35.1 31.6 62.5
Restricted cash included in other long-term assets at beginning of period 0.0 0.0 0.4
Cash, cash equivalents, and restricted cash in discontinued operations at beginning of period 0.0 0.0 8.0
Cash, cash equivalents, and restricted cash at beginning of year 104.2 53.4 120.3
Cash and cash equivalents at end of period 85.4 69.1 21.8
Restricted cash at end of period 37.7 35.1 31.6
Cash, cash equivalents, and restricted cash at end of year 123.1 104.2 53.4
Supplemental cash flow information:      
Interest (146.8) (147.7) (178.4)
Income tax refunds 0.7 2.7 1.0
Income tax payments (164.5) (109.3) (51.2)
Supplemental schedule of noncash investing and financing activities:      
Accrued purchases of property, equipment, and intangible assets 1.9 26.7 (3.5)
Joint venture contributions $ 11.8 $ 32.2 $ 28.6
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Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies:
Organization and Description of Business—
Encompass Health Corporation, incorporated in Delaware in 1984, including its subsidiaries, is a provider of inpatient rehabilitation services. We operate hospitals in 38 states and Puerto Rico, with concentrations in Florida and Texas. As of December 31, 2024, we operated 166 inpatient rehabilitation hospitals. We are the sole owner of 101 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 65 jointly owned hospitals.
Basis of Presentation and Consolidation—
The accompanying consolidated financial statements of Encompass Health and its subsidiaries were prepared in accordance with generally accepted accounting principles in the United States of America and include the assets, liabilities, revenues, and expenses of all wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. Certain prior year amounts may have been reclassified for comparative purposes to conform to the current-year financial statement presentation.
We use the equity method to account for our investments in entities we do not control, but where we have the ability to exercise significant influence over operating and financial policies. Consolidated Net income attributable to Encompass Health includes our share of the net earnings of these entities. The difference between consolidation and the equity method impacts certain of our financial ratios because of the presentation of the detailed line items reported in the consolidated financial statements for consolidated entities compared to a one line presentation of equity method investments.
We eliminate all significant intercompany accounts and transactions from our financial results.
Variable Interest Entities—
Any entity considered a variable interest entity (“VIE”) is evaluated to determine which party is the primary beneficiary and thus should consolidate the VIE. This analysis is complex, involves uncertainties, and requires significant judgment on various matters. In order to determine if we are the primary beneficiary of a VIE, we must determine what activities most significantly impact the economic performance of the entity, whether we have the power to direct those activities, and if our obligation to absorb losses or receive benefits from the VIE could potentially be significant to the VIE.
Use of Estimates and Assumptions—
The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) revenue reserves for contractual adjustments and uncollectible amounts; (2) fair value of acquired assets and assumed liabilities in business combinations; (3) asset impairments, including goodwill; (4) depreciable lives of assets; (5) useful lives of intangible assets; (6) economic lives and fair value of leased assets; (7) income tax valuation allowances; (8) uncertain tax positions; (9) fair value of stock options and restricted stock containing a market condition; (10) fair value of redeemable noncontrolling interests; (11) reserves for self-insured healthcare plans; (12) reserves for professional, workers’ compensation, and comprehensive general insurance liability risks; and (13) contingency and litigation reserves. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results could differ from those estimates.
Risks and Uncertainties—
As a healthcare provider, we are required to comply with extensive and complex laws and regulations at the federal, state, and local government levels. These laws and regulations relate to, among other things:
•licensure, certification, and accreditation;
•policies, either at the national or local level, delineating what conditions must be met to qualify for reimbursement under Medicare (also referred to as coverage requirements);
•coding and billing for services;
•requirements of the 60% compliance threshold under The Medicare, Medicaid and State Children’s Health Insurance Program (SCHIP) Extension Act of 2007;
•relationships with physicians and other referral sources, including physician self-referral and anti-kickback laws;
•quality of medical care;
•use and maintenance of medical supplies and equipment;
•maintenance and security of patient information and medical records;
• minimum staffing;
•acquisition and dispensing of pharmaceuticals and controlled substances;
•pricing transparency and similar consumer protection rules; and
•disposal of medical and hazardous waste.
In the future, changes in these laws or regulations or the manner in which they are enforced could subject our current or past practices to allegations of impropriety or illegality or could require us to make changes in our hospitals, equipment, personnel, services, capital expenditure programs, operating procedures, contractual arrangements, and patient admittance practices.
If we fail to comply with applicable laws and regulations, we could be required to return portions of reimbursements deemed after the fact to have not been appropriate. We could also be subjected to liabilities, including (1) criminal penalties, (2) civil penalties, including monetary penalties and the loss of our licenses to operate one or more of our hospitals, and (3) exclusion or suspension of one or more of our hospitals from participation in the Medicare, Medicaid, and other federal and state healthcare programs which, if lengthy in duration and material to us, could potentially trigger a default under our credit agreement. Because Medicare comprises a significant portion of our Net operating revenues, failure to comply with the laws and regulations governing the Medicare program and related matters, including anti-kickback and anti-fraud requirements, could materially and adversely affect us. Specifically, reductions in reimbursements, substantial damages, and other remedies assessed against us could have a material adverse effect on our business, financial position, results of operation, and cash flows. Even the assertion of a violation, depending on its nature, could have a material adverse effect upon our stock price or reputation and could cost us significant time and expense to defend.
Historically, the United States Congress and some state legislatures have periodically proposed significant changes in regulations governing the healthcare system. Many of these changes have resulted in limitations on the increases in and, in some cases, significant roll-backs or reductions in the levels of payments to healthcare providers for services under many government reimbursement programs. There can be no assurance that future governmental initiatives will not result in reimbursement freezes and reductions, or reimbursement increases that are less than the increases we experience in our costs of operation. Because we receive a significant percentage of our revenues from Medicare, such changes in legislation might have a material adverse effect on our financial position, results of operations, and cash flows.
In addition, there are increasing pressures from many third-party payors to control healthcare costs and to reduce or limit increases in reimbursement rates for medical services. Our relationships with managed care and nongovernmental third-party payors are generally governed by negotiated agreements. These agreements set forth the amounts we are entitled to receive for our services. We could be adversely affected in some of the markets where we operate if we are unable to negotiate and maintain favorable agreements with third-party payors.
Our third-party payors may also, from time to time, request audits of the amounts paid, or to be paid, to us. We could be adversely affected in some of the markets where we operate if the auditing payor alleges substantial overpayments were made to us due to coding errors or lack of documentation to support medical necessity determinations.
As discussed in Note 17, Contingencies and Other Commitments, we are a party to a number of lawsuits. We cannot predict the outcome of litigation filed against us. Substantial damages or other monetary remedies assessed against us could have a material adverse effect on our business, financial position, results of operations, and cash flows.
Net Operating Revenues—
Our Net operating revenues disaggregated by payor source are as follows (in millions):
Year Ended December 31,
202420232022
Medicare$3,495.3 $3,126.1 $2,843.1 
Medicare Advantage
903.7 776.1 654.6 
Managed care
579.2 531.4 505.2 
Medicaid179.4 190.7 183.3 
Other third-party payors41.7 41.8 39.5 
Workers’ compensation27.8 25.8 24.7 
Patients15.9 14.9 16.6 
Other income130.2 94.4 81.6 
Total$5,373.2 $4,801.2 $4,348.6 
We record Net operating revenues on an accrual basis using our best estimate of the transaction price for the type of service provided to the patient. Our estimate of the transaction price includes estimates of price concessions for such items as contractual allowances, potential adjustments that may arise from payment and other reviews, and uncollectible amounts. Our accounting systems calculate contractual allowances on a patient-by-patient basis based on the rates in effect for each primary third-party payor. Adjustments related to payment reviews by third-party payors or their agents are based on our historical experience and success rates in the claims adjudication process. Estimates for uncollectible amounts are based on the aging of our accounts receivable, our historical collection experience for each type of payor, and other relevant factors.
Management continually reviews the revenue transaction price estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms that result from contract renegotiations and renewals. Due to complexities involved in determining amounts ultimately due under reimbursement arrangements with third-party payors, which are often subject to interpretation, we may receive reimbursement for healthcare services authorized and provided that is different from our estimates, and such differences could be material. In addition, laws and regulations governing the Medicare and Medicaid programs are complex, subject to interpretation, and are routinely modified for provider reimbursement. All healthcare providers participating in the Medicare and Medicaid programs are required to meet certain financial reporting requirements. Federal regulations require submission of annual cost reports covering medical costs and expenses associated with the services provided under each hospital provider number to program beneficiaries. Annual cost reports required under the Medicare and Medicaid programs are subject to routine audits, which may result in adjustments to the amounts ultimately determined to be due to Encompass Health under these reimbursement programs. These audits often require several years to reach the final determination of amounts earned under the programs. If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material.
The Centers for Medicare & Medicaid Services (“CMS”) has been granted authority to suspend payments, in whole or in part, to Medicare providers if CMS possesses reliable information an overpayment, fraud, or willful misrepresentation exists. If CMS suspects payments are being made as the result of fraud or misrepresentation, CMS may suspend payment at any time without providing prior notice to us. The initial suspension period is limited to 180 days. However, the payment suspension period can be extended almost indefinitely if the matter is under investigation by the United States Department of Health and Human Services Office of Inspector General (the “HHS-OIG”) or the United States Department of Justice (the “DOJ”). Therefore, we are unable to predict if or when we may be subject to a suspension of payments by the Medicare and/or Medicaid programs, the possible length of the suspension period, or the potential cash flow impact of a payment suspension. Any such suspension would adversely impact our financial position, results of operations, and cash flows.
Pursuant to legislative directives and authorizations from Congress, CMS has developed and instituted various Medicare audit programs under which CMS contracts with private companies to conduct claims and medical record audits. As a matter of course, we undertake significant efforts through training and education to ensure compliance with Medicare requirements. However, past audits have led, and future audits may lead, to assertions we have been underpaid or overpaid by Medicare or submitted improper claims in some instances. Ultimately, audits may require us to refund any amounts determined to have been overpaid. Audits also require us to incur additional costs to respond to requests for records and defend the validity of payments and claims. In some circumstances auditors assert the authority to extrapolate denial rationales to large pools of claims not actually audited, which could increase the impact of the audit. We cannot predict when or how these audit programs will affect us.
Medicare Administrative Contractors (“MACs”), under programs known as “widespread probes,” have conducted pre-payment claim reviews of our Medicare billings and in some cases denied payment for certain diagnosis codes. We dispute, or “appeal,” most of these denials. As discussed above, our historical experience and success in the adjudication of these appeals is a component of our estimate of transaction price. The Medicare appeals adjudication process is administered by the Office of Medicare Hearings and Appeals (“OMHA”) and has been subject to significant delay resulting in a backlog of claims awaiting adjudication. Beginning in March 2020, OMHA increased the frequency of hearings and the number of claims set at each hearing, which we believe adds to the substantive and procedural deficiencies in the appeals process. During 2022, the backlog of “widespread probe” claims adjudicated by the administrative law judge (“ALJ”) continued and were substantially resolved. This OMHA practice resulted in a reduction in our success in the adjudication of these appeals, but have increased the pace of recovery of these claims. We have appealed certain adverse ALJ rulings to the Department Appeals Board (“DAB”), the final level of administrative review. As of December 31, 2024, approximately $4 million and $30 million in denied claims are awaiting review at the ALJ and DAB levels, respectively. In addition, we have appealed approximately $7 million in claims denied by the DAB pending review by the United States district courts as of December 31, 2024.
During the fourth quarter of 2023, we recorded an additional reserve totaling $21.9 million related to appeals pending before the DAB and several federal district courts. The increase in reserve was driven primarily by an increase in unfavorable adjudication outcomes experienced at the DAB during the second half of 2023 and largely offsets the remaining net carrying value of these claims. These appeals related primarily to claims denied prior to 2018. This adjustment did not impact our reserve methodology for ongoing claims audit programs, including TPE and IRF RCD (defined and discussed below). We will continue to pursue ongoing appeals before the DAB and federal district courts where economically beneficial.
Under CMS’s Targeted Probe and Educate (“TPE”) program, MACs use data analysis to identify healthcare providers with unusual billing practices, high claim error rates, and items and services that have high national error rates. Once a MAC selects a provider for claims review, the initial volume of claims review is limited to 20 to 40 claims. The TPE program includes up to three rounds of claims review if necessary with corresponding provider education and a subsequent period to allow for improvement. If results do not improve sufficiently after three rounds, the MAC may refer the provider to CMS for further action, which may include extrapolation of error rates to a broader universe of claims or referral to a UPIC or RAC (defined below). We cannot predict the impact of the TPE program on our ability to collect claims on a timely basis.
On December 14, 2020, CMS announced a five-year review choice demonstration for inpatient rehabilitation services (the “IRF RCD”), under which Medicare reimbursement claims are assessed for compliance with applicable coverage and clinical documentation requirements. In August 2023, IRFs located in Alabama began participation in IRF RCD. On March 1, 2024, CMS announced the expansion of IRF RCD, effective June 17, 2024, to include IRFs located in Pennsylvania and billing to a certain MAC. We do not bill to that MAC, so we are not subject to the program in Pennsylvania at this time. CMS plans to
expand IRF RCD further to Texas and California, but the timing for doing so is not known. CMS also intends to expand the IRF RCD program after the initial four state rollout but has yet to provide details of that expansion.
Under the IRF RCD, participating IRFs have an initial choice between pre-claim or post-payment review of 100% of Medicare claims submitted to demonstrate compliance with applicable requirements during the first six-month review period or cycle. We elected the pre-claim review option for our IRFs in Alabama for the first cycle. Under the pre-claim review choice, services can begin prior to the submission of the review request and continue while the decision is being made. The pre-claim review request with required documentation must be submitted, reviewed, and approved before the final claim is paid. If a certain percentage of the claims reviewed are found to be valid, the IRF may then opt out of the 100% review. The opt-out validation percentages for the second and third cycles were 85% or greater and 90% or greater, respectively. In opting out, the IRF may elect spot prepayment reviews of samples consisting of 5% of total claims or selective post-payment review of a statistically valid random sample. Our claim validation rate for the first cycle ending in February 2024 exceeded the required 80% at our IRFs in Alabama. For the second cycle, which began on May 1, 2024, we elected not to opt out, so our IRFs in Alabama remained subject to the 100% pre-claim review. None of our IRFs in Alabama achieved the 85% claim validation rate for the second cycle ending in October 2024. We believe many of the non-affirmations in the second cycle were based on application of improper standards or requirements that directly conflict with the Medicare coverage criteria for IRFs. In the third cycle, we are again submitting 100% of review requests pre-claim. We have engaged, and will continue to engage, with the MAC and CMS to ensure the review process is consistent with existing rules, regulations and statutes. Given the inconsistent review process applied by the MAC across the previous two cycles, we cannot predict the impact, if any, IRF RCD may have on the collectability of our Medicare claims over its five-year term and ultimately our financial position, results of operations, and cash flows.
In connection with CMS approved and announced Recovery Audit Contractors (“RACs”) audits related to IRFs, we received requests from 2013 to 2024 to review certain patient files for discharges occurring from 2010 to 2024. These RAC audits are focused on identifying Medicare claims that may contain improper payments. RAC contractors must have CMS approval before conducting these focused reviews which cover issues ranging from billing documentation to medical necessity. Medical necessity is an assessment by an independent physician of a patient’s ability to tolerate and benefit from intensive multi-disciplinary therapy provided in an IRF setting.
CMS has also established other types of contractors, including the Unified Program Integrity Contractors (“UPICs”) and the Supplemental Medical Review Contractor (“SMRC”). The UPICs conduct audits with a focus on potential fraud and abuse issues. Like the RACs, the UPICs conduct audits and have the ability to refer matters to the HHS-OIG or the DOJ. Unlike RACs, UPICs do not receive a specific financial incentive based on the amount of the error as a result of UPIC audits. We have, from time to time, received UPIC record requests which have resulted in claim denials on paid claims. We have appealed substantially all UPIC denials arising from these audits using the same process we follow for appealing other denials by contractors. As of December 31, 2024, we have appealed $18.0 million of overpayment determination related to one UPIC audit to the DAB, challenging both the denials and the improper use of extrapolation. It is not possible to predict when this matter will be resolved or the ultimate outcome. The SMRC conducts nationwide medical reviews of Medicare claims to determine compliance with coverage, coding, payment, and billing requirements. During the first quarter of 2023, the SMRC initiated a review of a subset of claims from March 2020 through December 2020 totaling approximately $21 million. We have received initial results for the claims under review and, as of December 31, 2024, approximately 89% of these have been approved with $0.1 million still under appeal.
To date, the Medicare claims that are subject to these post-payment audit requests represent less than 1% of our Medicare patient discharges from 2010 to 2024. Because we have confidence in the medical judgment of both the referring and admitting physicians who assess the treatment needs of their patients, we have appealed substantially all claim denials arising from these audits using the same process we follow for appealing denials by MACs. Due to the delays announced by CMS in the related adjudication process discussed above, we believe the resolution of any claims that are subsequently denied as a result of these claim audits could take several years. In addition, because we have limited experience with UPICs and RACs in the context of claims reviews of this nature, we cannot provide assurance as to the timing or outcomes of these disputes. As such, we make estimates for these claims based on our historical experience and success rates in the claims adjudication process, which is the same process we follow for denials by MACs. During 2024, 2023, and 2022, our adjustment to Net operating revenues for claims that are part of this post-payment claims review process was not material.
Our performance obligations relate to contracts with a duration of less than one year. Therefore, we elected to apply the optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. These unsatisfied or partially unsatisfied performance obligations primarily relate to services provided at the end of the reporting period.
We are subject to changes in government legislation that could impact Medicare payment levels and changes in payor patterns that may impact the level and timing of payments for services rendered.
Net operating revenues are recognized over time as the services are provided to the patient. The performance obligation is the rendering of services to the patient during the term of their inpatient stay. Revenues are recognized (or measured) using the input method as therapy, nursing, and auxiliary services are provided based on our estimate of the respective transaction price. Revenues recognized are subject to a number of elements which impact both the overall amount of revenue realized as well as the timing of the collection of the related accounts receivable. Factors considered in determining the estimated transaction price include the patient’s total length of stay for in-house patients, each patient’s discharge destination, the proportion of patients with secondary insurance coverage and the level of reimbursement under that secondary coverage, and the amount of charges that will be disallowed by payors. Such additional factors are assumed to remain consistent with the experience for patients discharged in similar time periods for the same payor classes.
Cash and Cash Equivalents—
Cash and cash equivalents include highly liquid investments with maturities of three months or less when purchased. Carrying values of Cash and cash equivalents approximate fair value due to the short-term nature of these instruments.
We maintain amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and we have not experienced any losses on such deposits.
Marketable Securities—
We record all equity securities with readily determinable fair values and for which we do not exercise significant influence at fair value and record the change in fair value for the reporting period in our consolidated statements of comprehensive income.
Accounts Receivable—
We report accounts receivable from services rendered at their estimated transaction price which takes into account price concessions from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, workers’ compensation programs, employers, and patients. Our accounts receivable are concentrated by type of payor. The concentration of patient service accounts receivable by payor class, as a percentage of total patient service accounts receivable, is as follows:
 As of December 31,
 20242023
Medicare55.5 %57.6 %
Managed care and other discount plans, including Medicare Advantage34.3 %32.3 %
Medicaid4.0 %4.0 %
Other third-party payors2.8 %2.7 %
Workers' compensation2.6 %2.5 %
Patients0.8 %0.9 %
Total100.0 %100.0 %
While revenues and accounts receivable from the Medicare program are significant to our operations, we do not believe there are significant credit risks associated with this government agency. We do not believe there are any other
significant concentrations of revenues from any particular payor that would subject us to any significant credit risks in the collection of our accounts receivable.
Accounts requiring collection efforts are reviewed via system-generated work queues that automatically stage (based on age and size of outstanding balance) accounts requiring collection efforts for patient account representatives. Collection efforts include contacting the applicable party (both in writing and by telephone), providing information (both financial and clinical) to allow for payment or to overturn payor decisions to deny payment, and arranging payment plans with self-pay patients, among other techniques. When we determine all in-house efforts have been exhausted or it is a more prudent use of resources, accounts may be turned over to a collection agency.
The collection of outstanding receivables from Medicare, managed care payors, other third-party payors, and patients is our primary source of cash and is critical to our operating performance. While it is our policy to verify insurance prior to a patient being admitted, there are various exceptions that can occur. Such exceptions include instances where we are (1) unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid, and it takes several days, weeks, or months before qualification for such benefits is confirmed or denied, and (3) the patient is transferred to our hospital from an acute care hospital without having access to a credit card, cash, or check to pay the applicable patient responsibility amounts (i.e., deductibles and co-payments).
Our primary collection risks relate to patient responsibility amounts and claims reviews conducted by MACs or other contractors. Patient responsibility amounts include accounts for which the patient was the primary payor or the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient co-payment amounts remain outstanding. Changes in the economy, such as increased unemployment rates or periods of recession, can further exacerbate our ability to collect patient responsibility amounts.
If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. Changes in general economic conditions, business office operations, payor mix, or trends in federal or state governmental and private employer healthcare coverage could affect our collection of accounts receivable, financial position, results of operations, and cash flows.
Property and Equipment—
We report land, buildings, improvements, vehicles, and equipment at cost, net of accumulated depreciation and amortization and any asset impairments. We depreciate our assets using the straight-line method over the shorter of the estimated useful life of the assets or life of the underlying leases. Useful lives are generally as follows:
 Years
Buildings
10 to 30
Leasehold improvements
2 to 15
Vehicles
5
Furniture, fixtures, and equipment
3 to 10
Maintenance and repairs of property and equipment are expensed as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We capitalize pre-acquisition costs when they are directly identifiable with a specific property, the costs would be capitalizable if the property were already acquired, and acquisition of the property is probable. We capitalize interest expense on major construction and development projects while in progress.
We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement, or disposal, the asset cost and related accumulated depreciation balances are removed from the respective accounts, and the resulting net amount, less any proceeds, is included as a component of income from continuing operations in the consolidated statements of comprehensive income. However, if the sale, retirement, or disposal involves a discontinued operation, the resulting net amount, less any proceeds, is included in the results of discontinued operations.
Leases—
We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the right-of-use asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the right-of-use asset and interest expense on the related lease liability. Certain of our lease agreements contain annual escalation clauses based on changes in the Consumer Price Index. The changes to the Consumer Price Index, as compared to our initial estimate at the lease commencement date, are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In general, we do not account for lease and non-lease components separately for purposes of establishing right-of-use assets and lease liabilities.
Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheets. We recognize lease expense for these leases on a straight-line basis over the lease term.
Goodwill and Other Intangible Assets—
We are required to test our goodwill and indefinite-lived intangible asset for impairment at least annually, absent some triggering event that would accelerate an impairment assessment. Absent any impairment indicators, we perform this impairment testing as of October 1st of each year. We recognize an impairment charge for any amount by which the carrying amount of the asset exceeds its implied fair value. We present an impairment charge as a separate line item within income from continuing operations in the consolidated statements of comprehensive income, unless the impairment is associated with a discontinued operation. In that case, we include the impairment charge, on a net-of-tax basis, within the results of discontinued operations.
We assess qualitative factors in our single reporting unit to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative impairment test, we would determine the fair value of our reporting unit using generally accepted valuation techniques including the income approach and the market approach. The income approach includes the use of our reporting unit’s discounted projected operating results and cash flows. This approach includes many assumptions related to pricing and volume, operating expenses, capital expenditures, discount factors, tax rates, etc. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairment in future periods. We reconcile the estimated fair value of our reporting unit to our market capitalization. When we dispose of a hospital, goodwill is allocated to the gain or loss on disposition using the relative fair value methodology.
We assess qualitative factors related to our indefinite-lived intangible asset to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative impairment test, we would determine the fair value of our indefinite-lived intangible asset using generally accepted valuation techniques including the relief-from-royalty method. This method is a form of the income approach in which value is equated to a series of cash flows and discounted at a risk-adjusted rate. It is based on a hypothetical royalty, calculated as a percentage of forecasted revenue, that we would otherwise be willing to pay to use the asset, assuming it were not already owned. This approach includes assumptions related to pricing and volume, as well as a royalty rate a hypothetical third party would be willing to pay for use of the asset. When making our royalty rate assumption, we consider rates paid in arms-length licensing transactions for assets comparable to our asset.
We amortize the cost of intangible assets with finite useful lives over their respective estimated useful lives to their estimated residual value. As of December 31, 2024, none of our finite useful lived intangible assets has an estimated residual value. We also review these assets for impairment whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount.
The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows:
 Estimated Useful Life
and Amortization Basis
Certificates of need
10 to 30 years using straight-line basis
Licenses
10 to 20 years using straight-line basis
Noncompete agreements
1 to 18 years using straight-line basis
Trade names:
Encompassindefinite-lived asset
All other
10 to 20 years using straight-line basis
Internal-use software
3 to 7 years using straight-line basis
Market access assets
20 years using accelerated basis
We capitalize the costs of obtaining or developing internal-use software, including external direct costs of material and services and certain directly related payroll costs. Amortization begins when the internal-use software is ready for its intended use. Costs incurred during the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred.
Impairment of Long-Lived Assets and Other Intangible Assets—
We assess the recoverability of long-lived assets (excluding goodwill and our indefinite-lived asset) and identifiable acquired intangible assets with finite useful lives, whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset to the expected net future cash flows to be generated by that asset, or, for identifiable intangibles with finite useful lives, by determining whether the amortization of the intangible asset balance over its remaining life can be recovered through undiscounted future cash flows. The amount of impairment of identifiable intangible assets with finite useful lives, if any, to be recognized is measured based on projected discounted future cash flows. We measure the amount of impairment of other long-lived assets (excluding goodwill) as the amount by which the carrying value of the asset exceeds the fair market value of the asset, which is generally determined based on projected discounted future cash flows or appraised values. We classify long-lived assets to be disposed of other than by sale as held and used until they are disposed. We report long-lived assets to be disposed of by sale as held for sale and recognize those assets in the balance sheet at the lower of carrying amount or fair value less cost to sell, and we cease depreciation.
Financing Costs—
We amortize financing costs using the effective interest method over the expected life of the related debt. Excluding financing costs related to our revolving line of credit (which are included in Other long-term assets), financing costs are presented as a direct deduction from the face amount of the financings. The related expense is included in Interest expense and amortization of debt discounts and fees in our consolidated statements of comprehensive income.
We accrete discounts and amortize premiums using the effective interest method over the expected life of the related debt, and we report discounts or premiums as a direct deduction from, or addition to, the face amount of the financing. The related income or expense is included in Interest expense and amortization of debt discounts and fees in our consolidated statements of comprehensive income.
Fair Value Measurements—
Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability.
The basis for these assumptions establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
•Level 1 – Observable inputs such as quoted prices in active markets;
•Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
•Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows:
•Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;
•Cost approach – Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and
•Income approach – Techniques to convert future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing models, and lattice models).
Our financial instruments consist mainly of cash and cash equivalents, restricted cash, restricted marketable securities, accounts receivable, accounts payable, letters of credit, and long-term debt. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximate fair value because of the short-term maturity of these instruments. The fair value of our letters of credit is deemed to be the amount of payment guaranteed on our behalf by third-party financial institutions. We determine the fair value of our long-term debt using quoted market prices, when available, or discounted cash flows based on various factors, including maturity schedules, call features, and current market rates.
On a recurring basis, we are required to report our restricted marketable securities at fair value. The fair values of our restricted marketable securities are determined based on quoted market prices in active markets or quoted prices, dealer quotations, or alternative pricing sources supported by observable inputs in markets that are not considered to be active.
In addition, there are assets and liabilities that are not required to be reported at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. The fair value of our property and equipment is determined using discounted cash flows and significant unobservable inputs, unless there is an offer to purchase such assets, which could be the basis for determining fair value. The fair value of our intangible assets, excluding goodwill, is determined using discounted cash flows and significant unobservable inputs. The fair value of our goodwill is determined using discounted projected operating results and cash flows, which involve significant unobservable inputs.
See also the “Redeemable Noncontrolling Interests” section of this note.
Noncontrolling Interests in Consolidated Affiliates—
The consolidated financial statements include all assets, liabilities, revenues, and expenses of less-than-100%-owned affiliates we control. Accordingly, we have recorded noncontrolling interests in the earnings and equity of such entities. We record adjustments to noncontrolling interests for the allocable portion of income or loss to which the noncontrolling interests holders are entitled based upon their portion of the subsidiaries they own. Distributions to holders of noncontrolling interests are adjusted to the respective noncontrolling interests holders’ balance.
Effective July 1, 2024, we expanded our existing joint venture with Piedmont Healthcare (“Piedmont”), which we control, by contributing the assets and operations of our previously wholly-owned 70-bed hospital in Augusta, Georgia. Piedmont contributed approximately $90 million on July 1, 2024, which indirectly resulted in Piedmont obtaining a 50% ownership interest in the hospital. As a result of this transaction, we recorded a post-tax gain of $23.2 million increasing Capital in excess of par value on the consolidated statement of shareholders’ equity for the year ended December 31, 2024. The
contribution from Piedmont is included in Contributions from noncontrolling interests of consolidated affiliates on the consolidated statement of cash flows for the year ended December 31, 2024.
Redeemable Noncontrolling Interests—
Certain of our joint venture agreements contain provisions that allow our partners to require us to purchase their interests in the joint venture at fair value at certain points in the future. Because these noncontrolling interests provide for redemption features that are not solely within our control, we classify them as Redeemable noncontrolling interests outside of permanent equity in our consolidated balance sheets. At the end of each reporting period, we compare the carrying value of the Redeemable noncontrolling interests to their estimated redemption value. If the estimated redemption value is greater than the current carrying value, the carrying value is adjusted to the estimated redemption value, with the adjustments recorded through equity in the line item Capital in excess of par value.
The fair value of our Redeemable noncontrolling interests in our joint venture entities is determined primarily using the income approach. The income approach includes the use of the joint venture entities’ projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the applicable joint venture entity, or Level 3 inputs. The projected operating results use management’s best estimates of economic and market conditions over the forecasted periods including assumptions for pricing and volume, operating expenses, and capital expenditures.
Share-Based Payments—
Encompass Health has shareholder-approved stock-based compensation plans that provide for the granting of stock-based compensation to certain employees and directors. All share-based payments to employees are recognized in the financial statements based on their estimated grant-date fair value and amortized on a straight-line basis over the applicable requisite service period.
Litigation Reserves—
We accrue for loss contingencies associated with outstanding litigation for which management has determined it is probable a loss contingency exists and the amount of loss can be reasonably estimated. If the accrued amount associated with a loss contingency is greater than $5.0 million, we also accrue estimated future legal fees associated with the loss contingency. This requires management to estimate the amount of legal fees that will be incurred in the defense of the litigation. These estimates are based on our expectations of the scope, length to complete, and complexity of the claims. In the future, additional adjustments may be recorded as the scope, length to complete, or complexity of outstanding litigation changes.
Advertising Costs—
We expense costs of print, radio, television, and other advertisements as incurred. Advertising expenses, primarily included in Other operating expenses within the accompanying consolidated statements of comprehensive income, were $5.8 million, $6.1 million, and $6.3 million in each of the years ended December 31, 2024, 2023, and 2022, respectively.
Income Taxes—
We provide for income taxes using the asset and liability method. This approach recognizes the amount of income taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequence of events recognized in the consolidated financial statements and income tax returns. Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates.
A valuation allowance is required when it is more likely than not some portion of the deferred tax assets will not be realized. Realization is dependent on generating sufficient future taxable income in the applicable tax jurisdiction. On a quarterly basis, we assess the likelihood of realization of our deferred tax assets considering all available evidence, both positive and negative. Our most recent operating performance, the scheduled reversal of temporary differences, our forecast of taxable income in future periods by jurisdiction, our ability to sustain a core level of earnings, and the availability of prudent tax planning strategies are important considerations in our assessment.
We evaluate our tax positions and establish assets and liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. We review these tax uncertainties in light of changing facts and circumstances, such as the progress of tax audits, and adjust them accordingly. We have used the with-and-without method to determine when we will recognize excess tax benefits from stock-based compensation.
Encompass Health and its corporate subsidiaries file a consolidated federal income tax return. Some subsidiaries consolidated for financial reporting purposes are not part of the consolidated group for federal income tax purposes and file separate federal income tax returns. State income tax returns are filed on a separate, combined, or consolidated basis in accordance with relevant state laws and regulations. Partnerships, limited liability companies, and other pass-through entities we consolidate or account for using the equity method of accounting may file separate federal, state, and local income tax returns. We include the allocable portion of each pass-through entity’s income or loss in our federal income tax return. We allocate the remaining income or loss of each pass-through entity to the other partners or members who are responsible for their portion of the taxes. We included the activity of Enhabit, Inc. and its subsidiaries in our consolidated and combined tax filings for 2022 up through the date of the Spin Off, which is defined and described in Note 2, Spin Off of Home Health and Hospice Business. Subsequent to the Spin Off, Enhabit, Inc. and its subsidiaries are no longer included in our consolidated and combined filings.
Assets and Liabilities in and Results of Discontinued Operations—
We report the disposal of the component, or group of components, as discontinued operations only when it represents a strategic shift that has, or will have, a major effect on our operations and financial results. In the period a component of an entity has been disposed of or classified as held for sale, we reclassify the results of operations for current and prior periods into a single caption titled (Loss) income from discontinued operations, net of tax. In addition, we classify the assets and liabilities of those components as current and noncurrent assets and liabilities within Other current assets, Other long-term assets, Other current liabilities, and Other long-term liabilities in our consolidated balance sheets. We also classify cash flows related to discontinued operations as one line item within each category of cash flows in our consolidated statements of cash flows.
Earnings per Common Share—
The calculation of earnings per common share is based on the weighted-average number of our common shares outstanding during the applicable period. The calculation for diluted earnings per common share recognizes the effect of all potential dilutive common shares that were outstanding during the respective periods, unless their impact would be antidilutive. The calculation of earnings per common share also considers the effect of participating securities. Stock-based compensation awards that contain nonforfeitable rights to dividends and dividend equivalents, such as our restricted stock units, are considered participating securities and are included in the computation of earnings per common share pursuant to the two-class method. In applying the two-class method, earnings are allocated to both common stock shares and participating securities based on their respective weighted-average shares outstanding for the period.
Treasury Stock—
Shares of common stock repurchased by us are recorded at cost as treasury stock. When shares are reissued, we use an average cost method to determine cost. The difference between the cost of the shares and the re-issuance price is added to or deducted from Capital in excess of par value. We account for the retirement of treasury stock as a reduction of retained earnings.
Comprehensive Income—
Comprehensive income is comprised of Net income and changes in unrealized gains or losses on available-for-sale securities and is included in the consolidated statements of comprehensive income.
Recently Adopted Accounting Pronouncements—
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires all public entities, including entities with a single reportable segment, to provide disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and
included within each reported measure of segment profit or loss, (2) the amount and description of the composition of other segment items which reconcile to segment profit or loss, and (3) the title and position of the entity’s CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and allocating resources. ASU 2023-07 was effective for us beginning January 1, 2024. The disclosures required are presented in Note 18, Segment Reporting.
Recent Accounting Pronouncements Not Yet Adopted—
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which intends to improve the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are required to apply the guidance prospectively but have the option to apply it retrospectively. We are currently evaluating the requirements of this standard and any potential impact it may have on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expense captions into specified categories within the notes to the financial statements for both interim and annual reporting periods. ASU 2024-03 is effective for our annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028. Early adoption is permitted. We are currently evaluating the requirements of this standard and any potential impact it may have on our consolidated financial statements.
We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our consolidated financial position, results of operations, or cash flows.
v3.25.0.1
Spin Off of Home Health and Hospice Business
 12 Months Ended
Dec. 31, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Spin Off of Home Health and Hospice Business Spin Off of Home Health and Hospice Business
On July 1, 2022, we completed the previously announced separation of our home health and hospice business through the distribution (the “Spin Off”) of all of the outstanding shares of common stock, par value $0.01 per share, of Enhabit, Inc. (“Enhabit”) to the stockholders of record of Encompass Health as of the close of business on June 24, 2022 (the “Record Date”). The Spin Off was effective at 12:01 a.m., Eastern Time, on July 1, 2022. The Spin Off was structured as a pro rata distribution of one share of Enhabit common stock for every two shares of Encompass Health common stock held of record as of the Record Date. No fractional shares were distributed. A cash payment was made in lieu of any fractional shares. As a result of the Spin Off, Enhabit is now an independent public company and its common stock is listed under the symbol “EHAB” on the New York Stock Exchange.
In accordance with applicable accounting guidance, the historical results of Enhabit have been presented as discontinued operations and, as such, have been excluded from continuing operations for the year ended December 31, 2022. In anticipation of the Spin Off, Enhabit transferred the “Encompass” trade name (net book value of $104.2 million) to us during the second quarter of 2022.
In connection with the Spin Off, on June 30, 2022, we entered into several agreements with Enhabit that govern the relationship of the parties following the Spin Off, including a Separation and Distribution Agreement.
The following table presents the results of operations of Enhabit as discontinued operations (in millions):
For the Year Ended December 31,
2022
Net operating revenue$542.3 
Operating expenses:
Salaries and benefits376.4 
Other operating expenses47.5 
Occupancy costs11.0 
Supplies11.7 
General and administrative expenses59.3 
Depreciation and amortization16.7 
Total operating expenses522.6 
Interest expense and amortization of debt discounts and fees0.2 
Income from discontinued operations before income taxes19.5 
Provision for income tax expense4.3 
Income from discontinued operations, net of tax15.2 
Less: Net income attributable to noncontrolling interests included in discontinued operations(1.3)
Net income attributable to Encompass Health included in discontinued operations$13.9 
Transaction costs of $56.7 million incurred during the year ended December 31, 2022 are included in general and administrative expenses in the table above and in (Loss) income from discontinued operations, net of tax, in the consolidated statements of comprehensive income. These charges primarily related to third-party advisory, consulting, legal and professional services, that were associated with the Spin Off.
During 2024 and 2023, we incurred legal costs of $2.9 million and $15.8 million, respectively, related to ongoing litigation against former executive officers of our home health and hospice business. These costs are included in (Loss) income from discontinued operations, net of tax, in the consolidated statements of comprehensive income.
v3.25.0.1
Variable Interest Entities
 12 Months Ended
Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Variable Interest Entities Variable Interest Entities:
As of December 31, 2024 and December 31, 2023, we consolidated eight limited partnership-like entities that are VIEs and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% as of December 31, 2024. Through partnership and management agreements with or governing each of these entities, we manage all of these entities and handle all day-to-day operating decisions. Accordingly, we have the decision-making power over the activities that most significantly impact the economic performance of our VIEs and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections and creation and maintenance of medical records. The terms of the agreements governing each of our VIEs prohibit us from using the assets of each VIE to satisfy the obligations of other entities.
The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheets, are as follows (in millions):
As of December 31,
20242023
Assets 
Current assets: 
Cash and cash equivalents$0.4 $0.2 
Accounts receivable
34.5 36.7 
Other current assets9.6 5.0 
Total current assets44.5 41.9 
Property and equipment, net135.7 128.8 
Operating lease right-of-use assets1.3 1.4 
Goodwill15.9 15.9 
Intangible assets, net1.0 1.2 
Other long-term assets9.7 18.5 
Total assets$208.1 $207.7 
Liabilities
Current liabilities:
Current portion of long-term debt$1.0 $0.9 
Accounts payable6.2 7.6 
Accrued payroll11.0 9.4 
Other current liabilities12.7 9.3 
Total current liabilities30.9 27.2 
Long-term debt, net of current portion12.7 13.6 
Long-term operating lease liabilities1.4 1.4 
Total liabilities$45.0 $42.2 
v3.25.0.1
Cash and Marketable Securities
 12 Months Ended
Dec. 31, 2024
Cash and Cash Equivalents [Abstract]  
Cash and Marketable Securities Cash and Marketable Securities:
The components of our investments as of December 31, 2024 are as follows (in millions):
 Cash & Cash EquivalentsRestricted CashRestricted Marketable SecuritiesTotal
Cash$85.4 $37.7 $— $123.1 
Equity securities— — 130.9 130.9 
Total
$85.4 $37.7 $130.9 $254.0 
The components of our investments as of December 31, 2023 are as follows (in millions):
 Cash & Cash EquivalentsRestricted CashRestricted Marketable SecuritiesTotal
Cash$69.1 $35.1 $— $104.2 
Equity securities— — 126.2 126.2 
Total
$69.1 $35.1 $126.2 $230.4 
Restricted Cash—
Restricted cash consisted of the following (in millions):
 As of December 31,
 20242023
Current:
Affiliate cash
$17.9 $17.7 
Self-insured captive funds
19.8 17.1 
Other— 0.3 
Total restricted cash$37.7 $35.1 
Affiliate cash represents cash accounts maintained by joint ventures in which we participate where one or more of our external partners requested, and we agreed, that the joint venture’s cash not be commingled with other corporate cash accounts and be used only to fund the operations of those joint ventures. Self-insured captive funds represent cash held at our wholly owned insurance captive, HCS, Ltd., as discussed in Note 10, Self-Insured Risks. These funds are committed to pay third-party administrators for claims incurred and are restricted by insurance regulations and requirements. These funds cannot be used for purposes outside HCS without the permission of the Cayman Islands Monetary Authority.
The classification of restricted cash held by HCS as current or noncurrent depends on the classification of the corresponding claims liability.
Marketable Securities—
Restricted marketable securities at both balance sheet dates represent restricted assets held at HCS. HCS insures a substantial portion of Encompass Health’s professional liability, workers’ compensation, and other insurance claims. These funds are committed for payment of claims incurred, and the classification of these marketable securities as current or noncurrent depends on the classification of the corresponding claims liability. As of December 31, 2024, $39.0 million of restricted marketable securities are included in Other current assets and $91.9 million are included in Other long-term assets in the consolidated balance sheet. As of December 31, 2023, $37.6 million of restricted marketable securities are included in Other current assets and $88.6 million are included in Other long-term assets in the consolidated balance sheet. During the years ended December 31, 2024, 2023, and 2022, $1.0 million, $1.3 million, and $(7.4) million, respectively, of unrealized net gains (losses) were recognized in our consolidated statements of comprehensive income on marketable securities still held at the reporting date.
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Accounts Receivable
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Accounts Receivable Accounts Receivable:
Accounts receivable consists of the following (in millions):
 As of December 31,
 20242023
Current:
Patient accounts receivable
$593.0 $599.8 
Other accounts receivable5.8 11.8 
598.8 611.6 
Noncurrent patient accounts receivable
30.6 20.9 
Accounts receivable$629.4 $632.5 
Because the resolution of claims that are part of Medicare audit programs can take several years, we review the patient receivables that are part of this adjudication process to determine their appropriate classification as either current or noncurrent.
Amounts considered noncurrent are included in Other long-term assets in our consolidated balance sheets. See Note 1, Summary of Significant Accounting Policies, “Net Operating Revenues,” for additional information.
v3.25.0.1
Property and Equipment
 12 Months Ended
Dec. 31, 2024
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment:
Property and equipment consists of the following (in millions):
 As of December 31,
 20242023
Land$302.6 $294.0 
Buildings3,859.3 3,402.8 
Leasehold improvements372.8 316.8 
Vehicles5.6 5.3 
Furniture, fixtures, and equipment808.8 723.3 
 5,349.1 4,742.2 
Less: Accumulated depreciation and amortization(2,111.9)(1,872.2)
 3,237.2 2,870.0 
Construction in progress405.9 431.0 
Property and equipment, net$3,643.1 $3,301.0 
As of December 31, 2024, approximately 66% of our consolidated Property and equipment, net held by Encompass Health Corporation and its guarantor subsidiaries was pledged to the lenders under our credit agreement. See Note 9, Long-term Debt, for additional information on our credit agreement.
Depreciation expense was $245.1 million, $215.7 million, and $187.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. Interest capitalized was $15.2 million, $13.5 million, and $10.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.
v3.25.0.1
Leases
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Leases Leases:
We lease real estate, vehicles, and equipment under operating and finance leases with non-cancelable terms generally expiring at various dates through 2039. Our operating and finance leases generally have 1- to 25-year terms, with one or more renewal options, primarily relating to our real estate leases, with terms to be determined at the time of renewal. The exercise of such lease renewal options is at our sole discretion, and to the extent we are reasonably certain we will exercise a renewal option, the years related to that option are included in our determination of the lease term for purposes of classifying and measuring a given lease. Certain leases also include options to purchase the leased property.
The components of lease costs are as follows (in millions):
For the Year Ended December 31,
202420232022
Operating lease cost $41.7 $40.9 $38.7 
Finance lease cost:
Amortization of right-of-use assets25.7 25.7 27.5 
Interest on lease liabilities24.7 26.2 29.0 
Total finance lease cost50.4 51.9 56.5 
Short-term and variable lease cost2.3 2.9 5.2 
Sublease income(3.1)(3.3)(2.9)
Total lease cost$91.3 $92.4 $97.5 
Supplemental consolidated balance sheet information related to leases is as follows (in millions):
As of December 31,
Classification20242023
Assets
Operating leaseOperating lease right-of-use assets$203.7 $208.5 
Finance lease (1)
Property and equipment, net221.5 247.2 
Total leased assets$425.2 $455.7 
Liabilities
Current liabilities:
Operating leaseCurrent operating lease liabilities$26.3 $24.1 
Finance leaseCurrent portion of long-term debt23.7 21.6 
Noncurrent liabilities:
Operating leaseLong-term operating lease liabilities189.7 196.1 
Finance leaseLong-term debt, net of current portion294.7 318.5 
Total leased liabilities$534.4 $560.3 
(1)    Finance lease assets are recorded net of accumulated amortization of $197.3 million and $171.6 million as of December 31, 2024 and 2023, respectively.
As of December 31,
20242023
Weighted Average Remaining Lease Term
Operating lease9.7 years9.5 years
Finance lease9.8 years10.7 years
Weighted Average Discount Rate
Operating lease6.4 %6.3 %
Finance lease7.7 %7.7 %
Maturities of lease liabilities as of December 31, 2024 are as follows (in millions):
Year Ending December 31,Operating LeasesFinance
Leases
2025$38.9 $46.7 
202639.6 47.9 
202737.7 47.4 
202836.7 46.4 
202922.4 47.3 
2030 and thereafter121.5 222.9 
Total lease payments296.8 458.6 
Less: Interest portion(80.8)(140.2)
Total lease liabilities$216.0 $318.4 
Supplemental cash flow information related to our leases is as follows (in millions):
For the Year Ended December 31,
202420232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$40.7 $39.0 $40.5 
Operating cash flows from finance leases25.5 27.1 29.7 
Financing cash flows from finance leases21.8 41.1 19.2 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$26.7 $26.2 $48.7 
Finance leases— 21.4 1.0 
Leases Leases:
We lease real estate, vehicles, and equipment under operating and finance leases with non-cancelable terms generally expiring at various dates through 2039. Our operating and finance leases generally have 1- to 25-year terms, with one or more renewal options, primarily relating to our real estate leases, with terms to be determined at the time of renewal. The exercise of such lease renewal options is at our sole discretion, and to the extent we are reasonably certain we will exercise a renewal option, the years related to that option are included in our determination of the lease term for purposes of classifying and measuring a given lease. Certain leases also include options to purchase the leased property.
The components of lease costs are as follows (in millions):
For the Year Ended December 31,
202420232022
Operating lease cost $41.7 $40.9 $38.7 
Finance lease cost:
Amortization of right-of-use assets25.7 25.7 27.5 
Interest on lease liabilities24.7 26.2 29.0 
Total finance lease cost50.4 51.9 56.5 
Short-term and variable lease cost2.3 2.9 5.2 
Sublease income(3.1)(3.3)(2.9)
Total lease cost$91.3 $92.4 $97.5 
Supplemental consolidated balance sheet information related to leases is as follows (in millions):
As of December 31,
Classification20242023
Assets
Operating leaseOperating lease right-of-use assets$203.7 $208.5 
Finance lease (1)
Property and equipment, net221.5 247.2 
Total leased assets$425.2 $455.7 
Liabilities
Current liabilities:
Operating leaseCurrent operating lease liabilities$26.3 $24.1 
Finance leaseCurrent portion of long-term debt23.7 21.6 
Noncurrent liabilities:
Operating leaseLong-term operating lease liabilities189.7 196.1 
Finance leaseLong-term debt, net of current portion294.7 318.5 
Total leased liabilities$534.4 $560.3 
(1)    Finance lease assets are recorded net of accumulated amortization of $197.3 million and $171.6 million as of December 31, 2024 and 2023, respectively.
As of December 31,
20242023
Weighted Average Remaining Lease Term
Operating lease9.7 years9.5 years
Finance lease9.8 years10.7 years
Weighted Average Discount Rate
Operating lease6.4 %6.3 %
Finance lease7.7 %7.7 %
Maturities of lease liabilities as of December 31, 2024 are as follows (in millions):
Year Ending December 31,Operating LeasesFinance
Leases
2025$38.9 $46.7 
202639.6 47.9 
202737.7 47.4 
202836.7 46.4 
202922.4 47.3 
2030 and thereafter121.5 222.9 
Total lease payments296.8 458.6 
Less: Interest portion(80.8)(140.2)
Total lease liabilities$216.0 $318.4 
Supplemental cash flow information related to our leases is as follows (in millions):
For the Year Ended December 31,
202420232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$40.7 $39.0 $40.5 
Operating cash flows from finance leases25.5 27.1 29.7 
Financing cash flows from finance leases21.8 41.1 19.2 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$26.7 $26.2 $48.7 
Finance leases— 21.4 1.0 
v3.25.0.1
Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets:
The following table shows changes in the carrying amount of Goodwill (in millions):
 Amount
Goodwill as of December 31, 2021$1,237.0 
Acquisitions26.2 
Goodwill as of December 31, 20221,263.2 
Acquisitions18.1 
Goodwill as of December 31, 20231,281.3 
Acquisitions2.7 
Goodwill as of December 31, 2024$1,284.0 
Goodwill increased in 2022, 2023 and 2024 as a result of our acquisitions of inpatient rehabilitation operations.
We performed impairment reviews as of October 1, 2024, 2023, and 2022 and concluded no Goodwill impairment existed. As of December 31, 2024, we had no accumulated impairment losses related to Goodwill.
The following table provides information regarding our other intangible assets (in millions):
 Gross Carrying AmountAccumulated AmortizationNet
Certificates of need:   
2024$131.4 $(49.0)$82.4 
2023120.9 (43.1)77.8 
Licenses:   
2024$65.7 $(56.4)$9.3 
202365.7 (55.4)10.3 
Noncompete agreements:   
2024$66.5 $(63.4)$3.1 
202366.7 (62.0)4.7 
Trade name - Encompass:
2024$135.2 $— $135.2 
2023135.2 — 135.2 
Trade names - all other:   
2024$39.6 $(23.6)$16.0 
202339.3 (22.2)17.1 
Internal-use software:   
2024$214.4 $(163.3)$51.1 
2023198.6 (166.4)32.2 
Market access assets:
2024$13.2 $(12.5)$0.7 
202313.2 (12.3)0.9 
Total intangible assets:   
2024$666.0 $(368.2)$297.8 
2023639.6 (361.4)278.2 
Amortization expense for other intangible assets is as follows (in millions):
 For the Year Ended December 31,
 202420232022
Amortization expense$28.8 $32.5 $28.8 
Total estimated amortization expense for our other intangible assets for the next five years is as follows (in millions):
Year Ending December 31,Estimated
Amortization Expense
2025$25.4 
202623.0 
202716.3 
202812.2 
202910.7 
v3.25.0.1
Long-term Debt
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Long-term Debt Long-term Debt:
Our long-term debt outstanding consists of the following (in millions):
 As of December 31,
 20242023
Credit Agreement—
Advances under revolving credit facility$20.0 $— 
Bonds payable—
5.75% Senior Notes due 2025
99.8 348.5 
4.50% Senior Notes due 2028
788.4 785.0 
4.75% Senior Notes due 2030
784.2 781.5 
4.625% Senior Notes due 2031
392.5 391.5 
Other notes payable94.5 66.0 
Finance lease obligations318.4 340.1 
 2,497.8 2,712.6 
Less: Current portion(138.6)(24.8)
Long-term debt, net of current portion$2,359.2 $2,687.8 
The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions):
Year Ending December 31,Face AmountNet Amount
2025$138.8 $138.6 
202639.4 39.4 
202766.1 66.1 
2028833.0 821.4 
202941.7 41.7 
Thereafter1,414.1 1,390.6 
Total$2,533.1 $2,497.8 
As a result of the redemptions discussed below, we recorded a $0.6 million and $1.4 million Loss on early extinguishment of debt in 2024 and 2022, respectively. There were no redemptions resulting in a Loss on early extinguishment of debt during 2023.
Senior Secured Credit Agreement—
The credit agreement provides for a $1 billion revolving credit facility, with a $260 million letter of credit subfacility and a swingline loan subfacility, all of which mature in October 2027. The credit agreement previously provided for a $270 million term loan commitment, the outstanding amount of which was repaid in June 2022.
Amounts drawn on the revolving credit facility bear interest at a rate per annum of, at our option, (1) secured overnight financing rate (“SOFR”) or (2) the higher of (a) Barclays Bank PLC’s prime rate and (b) the federal funds rate plus 0.5%, in each case, plus, in each case, an applicable margin that varies depending upon our leverage ratio. We are also subject to a commitment fee of 0.25% or 0.30%, depending on our leverage ratio, per annum on the daily amount of the unutilized commitments under the revolving credit facility. The current interest rate on SOFR borrowings under the credit agreement includes a credit spread of 1.25%.
The credit agreement contains affirmative and negative covenants and default and acceleration provisions, including a minimum interest coverage ratio and a maximum leverage ratio. Under one such negative covenant, we are restricted from paying common stock dividends, prepaying certain senior notes, making certain investments, and repurchasing preferred and common equity unless (1) we are not in default under the terms of the credit agreement and (2) our senior secured leverage ratio, as defined in the credit agreement, does not exceed 2x. In the event the senior secured leverage ratio exceeds 2x, these payments are subject to a limit of $200 million plus the Available Amount, as defined in the credit agreement. Our obligations under the credit agreement are secured by the current and future personal property of the Company and its subsidiary guarantors. The maximum leverage ratio in the financial covenants is 4.50x as of December 31, 2024.
In June 2022, Enhabit distributed $566.6 million to Encompass Health who used it to fully repay both the $250 million outstanding balance of the Encompass Health revolving credit facility and approximately $236 million of the Encompass Health term loan. Currently, there are no term loan commitments under the credit agreement.
As of December 31, 2024, $20 million were drawn under the revolving credit facility with an interest rate of 7.8%. As of December 31, 2023, no amount was drawn under the revolving credit facility. As of December 31, 2024 and 2023, $36.3 million and $31.9 million, respectively, were being utilized under the letter of credit subfacility, which were being used in the ordinary course of business to secure workers’ compensation and other insurance coverages and for general corporate purposes.
Bonds Payable—
Senior Notes
The Company’s 5.75% Senior Notes due 2025 (the “2025 Notes”), 4.50% Senior Notes due 2028 (the “2028 Notes”), 4.75% Senior Notes due 2030 (the “2030 Notes”), and 4.625% Senior Notes due 2031 (the “2031 Notes” and collectively the “Senior Notes”) were issued pursuant to an indenture (the “Base Indenture”) dated as of December 1, 2009, as supplemented by each Senior Notes’ respective supplemental indenture (together with the Base Indenture, the “Indenture”). Pursuant to the terms of the Indenture, the Senior Notes are jointly and severally guaranteed on a senior, unsecured basis by all of our existing and future subsidiaries that guarantee borrowings under our credit agreement and other capital markets debt. The Senior Notes are senior, unsecured obligations of Encompass Health and rank equally with our other senior indebtedness, senior to any of our subordinated indebtedness, and effectively junior to our secured indebtedness to the extent of the value of the collateral securing such indebtedness.
Upon the occurrence of a change in control (as defined in the Indenture), each holder of the Senior Notes may require us to repurchase all or a portion of the notes in cash at a price equal to 101% of the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest.
The Senior Notes contain covenants and default and acceleration provisions, that, among other things, limit our and certain of our subsidiaries’ ability to (1) incur additional debt, (2) make certain restricted payments, (3) consummate specified asset sales, (4) incur liens, and (5) merge or consolidate with another person.
On December 9, 2021, we announced the commencement of a consent solicitation of holders of the 2025 Notes, 2028 Notes, 2030 Notes, and 2031 Notes (collectively the “Notes”) for the adoption of certain amendments to the Indenture, which provided us with greater flexibility in effecting the Spin Off discussed in Note 2, Spin Off of Home Health and Hospice Business. Each Indenture contains restrictive covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to make certain asset dispositions, investments, and distributions to holders of our capital stock. The amendments to the Indentures permit us, subject to the leverage ratio condition set forth below, to distribute to our equity holders in one or more transactions (a “Distribution”) some or all of the common stock of a subsidiary that holds substantially all of the assets of our home health and hospice business. We may make any such distribution so long as the Leverage Ratio (as defined in each Indenture) is no more than 3.5 to 1.0 on a pro forma basis after giving effect thereto. The amendments also reduce the capacity under our restricted payments builder basket under each existing Indenture for the 2028 Notes, 2030 Notes, and 2031 Notes by $200 million and amends the definition of “Consolidated Net Income” to allow us to exclude from Consolidated Net Income (a component of the Leverage Ratio) any fees, expenses or charges related to any Distribution and the solicitation of consents from the holders of the Notes. In December 2021 and January 2022, we received the requisite consents for the adoption of these amendments. Under the terms of the amendments, we agreed to pay the holders of the Notes a total of $40.5 million, excluding fees. We paid $20.0 million and $20.5 million in January and June 2022, respectively.
2025 Notes
In September 2015, we issued $350 million of the 2025 Notes at par. The 2025 Notes mature on September 15, 2025 and bear interest at a per annum rate of 5.75%. Inclusive of financing costs, the effective interest rate on the 2025 Notes is 6.0%. Interest on the 2025 Notes is payable semiannually in arrears on March 15 and September 15. We may redeem the 2025 Notes at par, in whole or in part, at any time on or after September 15, 2023.
In August and November 2024, we redeemed $150 million and $100 million, respectively, of the outstanding principal balance of our 2025 Notes using cash on hand. Pursuant to the terms of the 2025 Notes, these optional redemptions were made at a price of par.
2028 and 2030 Notes
In September 2019, we issued $500 million of the 2028 Notes at par and $500 million of the 2030 Notes at par. Certain of the proceeds from this offering were used to fund the purchase of equity rights from management investors of our former home health and hospice business.
In May 2020, we issued an additional $300 million of the 2028 Notes at a price of 99.0% of the principal amount and an additional $300 million of the 2030 Notes at a price of 98.5% of the principal amount, which resulted in approximately $583 million in net proceeds. We used a portion of the net proceeds from this borrowing, together with cash on hand, to repay borrowings under our revolving credit facility.
The 2028 Notes mature on February 1, 2028 and bear interest at a per annum rate of 4.50%. Inclusive of financing costs, the effective interest rate on the 2028 Notes is 5.0%. Interest on the 2028 Notes is payable semiannually in arrears on February 1 and August 1. We may redeem the 2028 Notes, in whole or in part, at any time on or after February 1, 2024 at the redemption prices set forth below:
PeriodRedemption
Price*
2024101.125 %
2025 and thereafter100.000 %
* Expressed in percentage of principal amount
The 2030 Notes mature on February 1, 2030 and bear interest at a per annum rate of 4.75%. Inclusive of financing costs, the effective interest rate on the 2030 Notes is 5.2%. Interest on the 2030 Notes is payable semiannually in arrears on February 1 and August 1. We may redeem the 2030 Notes, in whole or in part, at any time on or after February 1, 2025 at the redemption prices set forth below:
PeriodRedemption
Price*
2025102.375 %
2026101.583 %
2027100.792 %
2028 and thereafter100.000 %
* Expressed in percentage of principal amount
2031 Notes
In October 2020, we issued $400 million of the 2031 Notes at par. The 2031 Notes mature on April 1, 2031 and bear interest at a per annum rate of 4.625%. Inclusive of financing costs, the effective interest rate on the 2031 Notes is 5.0%. Interest is payable semiannually in arrears on April 1 and October 1 of each year. We may redeem the 2031 Notes, in whole or in part, at any time on or after April 1, 2026 at the redemption prices set forth below:
PeriodRedemption
Price*
2026102.313 %
2027101.542 %
2028100.771 %
2029 and thereafter100.000 %
* Expressed in percentage of principal amount
Former 2023 Notes
In March 2022, we redeemed the remaining $100 million in outstanding principal amount of the 5.125% Senior Notes due 2023 (the “Former 2023 Notes) using capacity under our revolving credit facility. Pursuant to the terms of the Former 2023 Notes, this optional redemption was made at a price of par. The Former 2023 Notes would have matured on March 15, 2023. Inclusive of financing costs, the effective interest rate on the Former 2023 Notes was 5.4%. Interest on the Former 2023 Notes was payable semiannually in arrears on March 15 and September 15.
Other Notes Payable—
Our notes payable consist of the following (in millions):
As of December 31,
20242023Current Interest Rates
Sale/leaseback transactions involving real estate accounted for as financings
$28.0 $28.0 
9.2% to 13.4%
Construction of new hospitals47.6 38.0 
5.0% to 6.3%
Software contracts18.9 — 
5.5% to 6.5%
Other notes payable$94.5 $66.0 
v3.25.0.1
Self-Insured Risks
 12 Months Ended
Dec. 31, 2024
Insurance [Abstract]  
Self-Insured Risks Self-Insured Risks:
We insure a substantial portion of our professional liability, general liability, and workers’ compensation risks through a self-insured retention program (“SIR”) underwritten by our consolidated wholly owned offshore captive insurance subsidiary, HCS, Ltd., which we fund via regularly scheduled premium payments. HCS is an insurance company licensed by the Cayman Island Monetary Authority. We use HCS to fund the first $45 million for annual aggregate losses associated with general and professional liability risks. Workers’ compensation exposures are capped on a per claim basis. Risks in excess of specified limits per claim and in excess of our aggregate SIR amount are covered by unrelated commercial carriers.
The following table presents the changes in our self-insurance reserves (in millions):
202420232022
Balance at beginning of period, gross$184.5 $175.1 $169.4 
Less: Reinsurance receivables
(36.4)(32.3)(30.0)
Balance at beginning of period, net148.1 142.8 139.4 
Increase for the provision of current year claims59.1 54.7 50.5 
Decrease for the provision of prior year claims(10.9)(10.5)(8.2)
Payments related to current year claims(6.9)(8.1)(7.1)
Payments related to prior year claims(32.2)(30.8)(31.8)
Balance at end of period, net157.2 148.1 142.8 
Add: Reinsurance receivables
37.6 36.4 32.3 
Balance at end of period, gross$194.8 $184.5 $175.1 
As of December 31, 2024 and 2023, $56.2 million and $52.7 million, respectively, of these reserves are included in Other current liabilities in our consolidated balance sheets.
Provisions for these risks are based primarily upon actuarially determined estimates. These reserves represent the unpaid portion of the estimated ultimate cost of all reported and unreported losses incurred through the respective consolidated balance sheet dates. The reserves are estimated using individual case-basis valuations and actuarial analyses. Those estimates are subject to the effects of trends in loss severity and frequency. The estimates are continually reviewed and adjustments are recorded as experience develops or new information becomes known. The changes to the estimated ultimate loss amounts are included in current operating results.
The reserves for these self-insured risks cover approximately 1,100 individual claims at December 31, 2024 and 2023, and estimates for potential unreported claims. The time period required to resolve these claims can vary depending upon the jurisdiction, the nature, and the form of resolution of the claims. The estimation of the timing of payments beyond a year can vary significantly. Although considerable variability is inherent in reserve estimates, management believes the reserves for losses and loss expenses are adequate; however, there can be no assurance the ultimate liability will not exceed management’s estimates.
v3.25.0.1
Redeemable Noncontrolling Interests
 12 Months Ended
Dec. 31, 2024
Noncontrolling Interest [Abstract]  
Redeemable Noncontrolling Interests Redeemable Noncontrolling Interests:
The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions):
For the Year Ended December 31,
202420232022
Balance at beginning of period$42.0 $35.6 $42.2 
Net income attributable to noncontrolling interests
5.1 8.3 7.2 
Distributions declared(10.2)(1.1)(5.3)
Contribution to joint ventures18.0 — — 
Change in fair value1.6 (0.8)(3.4)
Other— — 0.1 
Spin off of Enhabit, Inc.— — (5.2)
Balance at end of period$56.5 $42.0 $35.6 
The following table reconciles the net income attributable to nonredeemable Noncontrolling interests, as recorded in the shareholders’ equity section of the consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests, as recorded in the mezzanine section of the consolidated balance sheets, to the Net income attributable to noncontrolling interests presented in the consolidated statements of comprehensive income (in millions):
For the Year Ended December 31,
202420232022
Net income attributable to nonredeemable noncontrolling interests$135.8 $102.7 $87.7 
Net income attributable to redeemable noncontrolling interests5.1 8.3 7.2 
Net income attributable to noncontrolling interests$140.9 $111.0 $94.9 
v3.25.0.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements:
Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions):
  Fair Value Measurements at Reporting Date Using
As of December 31, 2024Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Valuation Technique (1)
Equity securities$130.9 $4.2 $126.7 $— M
Redeemable noncontrolling interests56.5 — — 56.5 I
As of December 31, 2023     
Equity securities$126.2 $4.0 $122.2 $— M
Redeemable noncontrolling interests42.0 — — 42.0 I
(1)The two valuation techniques are: market approach (M) and income approach (I).
There are assets and liabilities that are not required to be measured at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. During the years ended December 31, 2024, 2023, and 2022, we did not record any material gains or losses related to these assets.
As discussed in Note 1, Summary of Significant Accounting Policies, “Fair Value Measurements,” the carrying value equals fair value for our financial instruments that are not included in the table below and are classified as current in our consolidated balance sheets. The carrying amounts and estimated fair values for our other financial instruments are presented in the following table (in millions):
 As of December 31, 2024As of December 31, 2023
 Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Long-term debt:    
Advances under revolving credit facility$20.0 $20.0 $— $— 
5.75% Senior Notes due 2025
99.8 99.7 348.5 349.3 
4.50% Senior Notes due 2028
788.4 772.3 785.0 763.6 
4.75% Senior Notes due 2030
784.2 759.0 781.5 755.0 
4.625% Senior Notes due 2031
392.5 369.9 391.5 369.4 
Other notes payable94.5 94.5 66.0 66.0 
Financial commitments:    
Letters of credit— 36.3 — 31.9 
Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies, “Fair Value Measurements” and “Redeemable Noncontrolling Interests.”
v3.25.0.1
Share-Based Payments
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Share-Based Payments Share-Based Payments:
The Company has awarded employee stock-based compensation in the form of stock options and restricted stock awards (“RSAs”) under the terms of share-based incentive plans designed to align employee and executive interests to those of its stockholders. All employee stock-based compensation awarded during 2024, 2023, and 2022 was issued under the 2016 Omnibus Performance Incentive Plan, a stockholder-approved plan that reserves and provides for the grant of up to 16,860,765 shares of common stock after adjustment for the effect of the Spin Off. This plan allows for the grants of nonqualified stock options, incentive stock options, restricted stock, stock appreciate rights, performance shares, performance share units, dividend equivalents, restricted stock units (“RSUs”), and/or other stock-based awards. Stock-based compensation expense recognized in continuing operations was $48.3 million, $50.6 million, and $29.2 million during 2024, 2023, and 2022, respectively. Stock-based compensation expense classified as discontinued operations was $2.5 million during 2022.
Stock Options—
Under our share-based incentive plans, officers and employees are given the right to purchase shares of Encompass Health common stock at a fixed grant price determined on the day the options are granted. The terms and conditions of the options, including exercise prices and the periods in which options are exercisable, are generally at the discretion of the compensation and human capital committee of our board of directors. However, no options are exercisable beyond ten years from the date of grant. Granted options vest over the awards’ requisite service periods, which are generally three years.
The fair values of the options granted during the years ended December 31, 2024, 2023, and 2022 have been estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 For the Year Ended December 31,
 202420232022
Expected volatility27.9 %28.5 %28.3 %
Risk-free interest rate4.2 %4.2 %1.7 %
Expected life (years)7.26.97.8
Dividend yield1.0 %1.1 %1.9 %
The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, the Black-Scholes option-pricing model requires the input of highly subjective assumptions, including the expected stock price volatility. We estimate our expected term through an analysis of actual, historical post-vesting exercise, cancellation, and expiration behavior by our officers and projected post-vesting activity of outstanding options. We calculate volatility based on the historical volatility of our common stock over the period commensurate with the expected term of the options. The risk-free interest rate is the implied daily yield currently available on U.S. Treasury issues with a remaining term closely approximating the expected term used as the input to the Black-Scholes option-pricing model. We estimated our dividend yield based on our annual dividend rate and our stock price on the dividend payment dates. Under the Black-Scholes option-pricing model, the weighted-average grant date fair value per share of employee stock options granted during the years ended December 31, 2024, 2023, and 2022 was $26.14, $19.23, and $17.29, respectively.
A summary of our stock option activity and related information is as follows:
 Shares
(In Thousands)		Weighted- Average Exercise Price per ShareWeighted- Average Remaining Life (Years)Aggregate Intrinsic Value
(In Millions)
Outstanding, December 31, 2023853 $49.52   
Granted64 74.20   
Exercised(77)31.66   
Outstanding, December 31, 2024840 53.05 5.1$33.0 
Exercisable, December 31, 2024686 50.72 4.328.6 
We recognized approximately $1.9 million, $2.5 million, and $1.2 million of compensation expense related to our stock options for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, there was $0.3 million of unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of 19 months. The total intrinsic value of options exercised during the years ended December 31, 2024, 2023, and 2022 was $4.0 million, $2.5 million, and $1.8 million, respectively.
Restricted Stock—
The RSAs granted in 2024, 2023, and 2022 included service-based awards and performance-based awards (that also included a service requirement). These awards generally vest over a three-year requisite service period. For RSAs with a service and/or performance requirement, the fair value of the RSA is determined by the closing price of our common stock on the grant date. A portion of the RSAs granted in 2024 and 2023 also includes a market condition for certain members of management. For awards with a market condition, the fair value of the market condition component of the RSAs is determined using a lattice model. Inputs into the model include the historical price volatility of our common stock, the historical volatility of the common stock of the companies in the defined peer group, and the risk-free interest rate. Utilizing these inputs and potential future changes in stock prices, multiple trials are run to determine the fair value.
A summary of our issued restricted stock awards is as follows (share information in thousands):
 SharesWeighted-Average Grant Date Fair Value
Nonvested shares at December 31, 2023706 $63.60 
Granted620 61.67 
Vested(481)65.39 
Forfeited(41)61.52 
Nonvested shares at December 31, 2024804 61.14 
The weighted-average grant-date fair value of restricted stock granted during the years ended December 31, 2023 and 2022 was $65.20 and $74.08 per share, respectively. We recognized approximately $44.9 million, $46.6 million, and $26.4 million of compensation expense related to our restricted stock awards for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, there was $36.2 million of unrecognized compensation expense related to unvested restricted stock. This cost is expected to be recognized over a weighted-average period of 21 months. The remaining unrecognized compensation expense for the performance-based awards may vary each reporting period based on changes in the expected achievement of performance measures. The total fair value of shares vested during the years ended December 31, 2024, 2023, and 2022 was $33.7 million, $24.3 million, and $20.0 million, respectively. We accrue dividends on outstanding RSAs, which are paid upon vesting.
Nonemployee Stock-Based Compensation Plans—
During the years ended December 31, 2024, 2023, and 2022, we provided incentives to our nonemployee members of our board of directors through the issuance of RSUs out of our share-based incentive plans. RSUs are fully vested when awarded and receive dividend equivalents in the form of additional RSUs upon the payment of a cash dividend on our common stock. During the years ended December 31, 2024, 2023, and 2022, we issued 23,509, 32,365, and 22,469 RSUs, respectively, with a fair value of $83.42, $63.00, and $67.42, respectively, per unit. We recognized approximately $1.5 million of compensation expense upon their issuance in 2024, 2023, and 2022. There was no unrecognized compensation related to unvested shares as of December 31, 2024. During the years ended 2024, 2023, and 2022, we issued an additional 5,707, 7,518, and 11,976, respectively, of RSUs as dividend equivalents. During the year ended December 31, 2024, 314,998 RSUs were released in relation to the retirement of certain former members of our board of directors. The total fair value of shares released during the year ended December 31, 2024 was $29.1 million. As of December 31, 2024, 516,198 RSUs were outstanding. In addition to the above, we issued 130,406 additional RSUs in 2022 to current and former members of our board of directors in connection with the Spin Off. Such adjusted awards preserved the same intrinsic value and general terms and conditions (including vesting) as were in place immediately prior to the adjustments.
v3.25.0.1
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans:
Substantially all Encompass Health employees are eligible to enroll in Encompass Health-sponsored healthcare plans, including coverage for medical and dental benefits. Our primary healthcare plans are national plans administered by third-party administrators. We are self-insured for these plans. During 2024, 2023, and 2022, costs associated with these plans, net of amounts paid by employees, approximated $227.4 million, $186.2 million, and $174.5 million, respectively.
The Encompass Health Corporation 401(k) Retirement Plan (the “401(k) Plan”) is a qualified 401(k) savings plan. The 401(k) Plan allows eligible employees to contribute up to 100% of their pay on a pre-tax basis into their individual retirement account in the plan subject to the normal maximum limits set annually by the Internal Revenue Service. Encompass Health employees who are at least 21 years of age are eligible to participate in the 401(k) Plan and all contributions to the plan are in the form of cash. Encompass Health’s employer matching contribution under the 401(k) Plan is 50% of the first 6% of each participant’s elective deferrals, which vest 100% after three years of service. Participants are always fully vested in their own contributions.
Employer contributions to the 401(k) Plan approximated $32.1 million, $31.3 million, and $28.7 million in 2024, 2023, and 2022, respectively. In 2024, 2023, and 2022, approximately $2.9 million, $1.1 million, and $1.4 million, respectively, from forfeited accounts were used to fund the matching contributions in accordance with the terms of the 401(k) Plan.
Senior Management Bonus Program—
We maintain a Senior Management Bonus Program to reward senior management for performance based on a combination of corporate or regional goals for all periods presented. The corporate and regional goals are approved on an annual basis by our board of directors as part of our routine budgeting and financial planning process. The program applies to persons who join the Company in, or are promoted to, senior management positions. In 2025, we expect to pay approximately $28.1 million under the program for the year ended December 31, 2024. In March 2024 and 2023, we paid $27.9 million and $14.5 million, respectively, under the program for the years ended December 31, 2023 and 2022.
v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes:
The significant components of the Provision for income tax expense related to continuing operations are as follows (in millions):
 For the Year Ended December 31,
 202420232022
Current:   
Federal$111.0 $101.7 $58.7 
State and other28.5 26.6 13.5 
Total current expense139.5 128.3 72.2 
Deferred:   
Federal8.6 (0.7)17.9 
State and other2.1 4.6 10.0 
Total deferred expense10.7 3.9 27.9 
Total income tax expense related to continuing operations$150.2 $132.2 $100.1 
A reconciliation of differences between the federal income tax at statutory rates and our actual income tax expense on our income from continuing operations, which include federal, state, and other income taxes, is presented below:
 For the Year Ended December 31,
 202420232022
Tax expense at statutory rate21.0 %21.0 %21.0 %
Increase (decrease) in tax rate resulting from:   
State and other income taxes, net of federal tax benefit3.9 %4.1 %4.0 %
Increase in valuation allowance— %0.3 %0.6 %
Noncontrolling interests(3.8)%(4.0)%(4.4)%
Share-based windfall tax benefits(1.0)%— %— %
Other, net(0.1)%0.4 %1.0 %
Income tax expense20.0 %21.8 %22.2 %
The Provision for income tax expense in 2024 was less than the federal statutory rate primarily due to the impact of noncontrolling interests and share-based windfall tax benefits, offset by state and other income tax expense. The Provision for income tax expense in 2023 and 2022 was greater than the federal statutory rate primarily due to state and other income tax expense and a gross increase in valuation allowance, offset by the impact of noncontrolling interests. See Note 1, Summary of Significant Accounting Policies, “Income Taxes,” for a discussion of the allocation of income or loss related to pass-through entities, which is referred to as the impact of noncontrolling interests in this discussion.
Deferred income taxes recognize the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes and the impact of available NOLs. The significant components of our deferred tax assets and liabilities are presented in the following table (in millions):
 As of December 31,
 20242023
Deferred income tax assets:  
Net operating loss$8.8 $23.1 
Insurance reserve20.9 20.1 
Stock-based compensation24.0 21.4 
Revenue reserves8.0 7.6 
Operating lease liabilities7.9 8.8 
Other accruals29.4 26.2 
Tax credits17.0 14.6 
Total deferred income tax assets116.0 121.8 
Less: Valuation allowance(21.0)(28.4)
Net deferred income tax assets95.0 93.4 
Deferred income tax liabilities:  
Intangibles(63.4)(62.6)
Operating lease right-of-use assets(6.8)(7.8)
Property, net(18.8)(18.1)
Carrying value of partnerships(110.9)(91.7)
Other(0.3)(0.2)
Total deferred income tax liabilities(200.2)(180.4)
Net deferred income tax liabilities$(105.2)$(87.0)
We have state NOLs of $8.8 million that expire in various amounts at varying times through 2034. For the years ended December 31, 2024 and 2023, the net decrease in our valuation allowance was $7.4 million and $7.4 million, respectively. The decrease in our valuation allowance in 2024 and 2023 related primarily to the utilization and expiration of state NOLs.
As of December 31, 2024, we have a remaining valuation allowance of $21.0 million. This valuation allowance remains recorded primarily due to unusable foreign tax credits generated by our operations in Puerto Rico. We determined it was necessary to maintain a valuation allowance on our foreign tax credits due to uncertainties related to our ability to utilize a portion of these credits before they expire. The amount of the valuation allowance has been determined based on the weight of all available evidence, as described above, including management’s estimates of taxable income over the periods in which the related deferred tax assets will be recoverable.
Our continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. Interest recorded as part of our income tax provision during 2024, 2023, and 2022 was not material. Accrued interest income related to income taxes as of December 31, 2024 and 2023 was not material.
In December 2016, we signed an agreement with the IRS to participate in their Compliance Assurance Process (“CAP”) for the 2017 tax year and have renewed this agreement each year since. CAP is a program in which we and the IRS endeavor to agree on the treatment of significant tax positions prior to the filing of our federal income tax returns. In December 2024, the IRS issued a no change letter effectively closing our 2022 tax year audit. Thus, the statute of limitations has expired, or we have settled, federal income tax examinations with the IRS for all tax years through 2022.
In February 2024, the IRS offered, and we accepted, admission into the IRS Bridge Plus Pilot program for the years 2023 and 2024. Under this program, we are required to provide additional documentation (including a draft return) to the IRS
prior to filing our return. The IRS performs a risk assessment review of this documentation and provides recommendations to us. We then file our return and submit a post-filing representation that our return was filed consistent with the documentation provided and the IRS recommendations (if any). After further review, the IRS then issues either a full or partial acceptance letter. Our state income tax returns are also periodically examined by various regulatory taxing authorities. We are not currently under audit by any state.
For the tax years that remain open under the applicable statutes of limitations, management considered potential unrecognized tax benefits and determined there are no material unrecognized tax benefits that would impact prior years’ income taxes.
v3.25.0.1
Earnings per Common Share
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Earnings per Common Share Earnings per Common Share:
The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):
 For the Year Ended December 31,
 202420232022
Basic:
Numerator:   
Income from continuing operations$599.4 $475.0 $350.7 
Less: Net income attributable to noncontrolling interests included in continuing operations(140.9)(111.0)(93.6)
Less: Income from continuing operations allocated to participating securities(2.8)(2.4)(1.1)
Income from continuing operations attributable to Encompass Health common shareholders455.7 361.6 256.0 
(Loss) income from discontinued operations, net of tax(2.8)(12.0)15.2 
Less: Net income attributable to noncontrolling interests included in discontinued operations— — (1.3)
Less: Income from discontinued operations allocated to participating securities— — (0.1)
(Loss) income from discontinued operations attributable to Encompass Health common shareholders(2.8)(12.0)13.8 
Net income attributable to Encompass Health common shareholders$452.9 $349.6 $269.8 
Denominator:   
Basic weighted average common shares outstanding99.9 99.5 99.2 
Basic earnings per share attributable to Encompass Health common shareholders:
   
Continuing operations
$4.56 $3.63 $2.58 
Discontinued operations
(0.03)(0.12)0.14 
Net income$4.53 $3.51 $2.72 
Diluted:
Numerator:
Income from continuing operations$599.4 $475.0 $350.7 
Less: Net income attributable to noncontrolling interests included in continuing operations(140.9)(111.0)(93.6)
Income from continuing operations attributable to Encompass Health common shareholders458.5 364.0 257.1 
(Loss) income from discontinued operations, net of tax(2.8)(12.0)15.2 
Less: Net income attributable to noncontrolling interests included in discontinued operations— — (1.3)
(Loss) income from discontinued operations attributable to Encompass Health common shareholders(2.8)(12.0)13.9 
Net income attributable to Encompass Health common shareholders$455.7 $352.0 $271.0 
Denominator:   
Diluted weighted average common shares outstanding
102.2 101.3 100.4 
Diluted earnings per share attributable to Encompass Health common shareholders:
   
Continuing operations
$4.49 $3.59 $2.56 
Discontinued operations
(0.03)(0.12)0.14 
Net income
$4.46 $3.47 $2.70 
The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions):
For the Year Ended December 31,
202420232022
Basic weighted average common shares outstanding99.9 99.5 99.2 
Restricted stock awards, dilutive stock options, and restricted stock units
2.3 1.8 1.2 
Diluted weighted average common shares outstanding102.2 101.3 100.4 
Options to purchase shares of common stock outstanding during December 31, 2024 were immaterial. Options to purchase approximately 0.3 million and 0.4 million shares of common stock were outstanding during December 31, 2023 and 2022, respectively, but were not included in the computation of diluted weighted-average shares because to do so would have been antidilutive.
On October 28, 2013, we announced our board of directors authorized the repurchase of up to $200 million of our common stock, which has been amended from time to time. Most recently, on July 24, 2024, our board of directors approved resetting the aggregate common stock repurchase authorization to $500 million. As of December 31, 2024, approximately $489 million remained under this authorization. The repurchase authorization does not require the repurchase of a specific number of shares, has an indefinite term, and is subject to termination at any time by our board of directors. During 2024, we repurchased 0.4 million shares of our common stock in the open market for $31.1 million. There were no repurchases of our common stock during 2023 or 2022.
In July 2019, our board of directors approved an increase in our quarterly dividend and declared a cash dividend of $0.28 per share. The cash dividend of $0.28 per common share was declared and paid in each quarter through July 2022. In July 2022, our board of directors revised our quarterly dividend in response to the Spin Off and declared a cash dividend of $0.15 per share. The cash dividend of $0.15 per common share was declared and paid in each quarter through July 2024. In July 2024, our board of directors approved an increase in our quarterly dividend and declared a cash dividend of $0.17 per share. Subsequent to July 2024, the cash dividend of $0.17 per common share was declared and paid in each quarter through January 2025. Future dividend payments are subject to declaration by our board of directors.
v3.25.0.1
Contingencies and Other Commitments
 12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Other Commitments Contingencies and Other Commitments:
We provide services in the highly regulated healthcare industry. Furthermore, operating inpatient rehabilitation hospitals requires significant staffing and involves intensive therapy for individuals suffering from significant physical or cognitive disabilities or injuries. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period.
The False Claims Act allows private citizens, called “relators,” to institute civil proceedings on behalf of the United States alleging violations of the False Claims Act. These lawsuits, also known as “whistleblower” or “qui tam” actions, can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to the relators who successfully prosecute or bring these suits to the government. Qui tam cases are sealed at the time of filing, which means knowledge of the information contained in the complaint typically is limited to the relator, the federal government, and the presiding court. The defendant in a qui tam action may remain unaware of the existence of a sealed complaint for years. While the complaint is under seal, the government reviews the merits of the case and may conduct a broad investigation and seek discovery from the defendant and other parties before deciding whether to intervene in the case and take the lead on litigating the claims. The court lifts the seal when the government makes its decision on whether to intervene. If the government decides not to intervene, the relator may elect to continue to pursue the lawsuit individually on behalf of the government. It is possible that qui tam lawsuits have been filed against us, which suits remain under seal, or that we are unaware of such filings or precluded by existing law or court order from discussing or disclosing the filing of such suits. We may be subject to liability under one or more undisclosed qui tam cases brought pursuant to the False Claims Act.
It is our obligation as a participant in Medicare and other federal healthcare programs to routinely conduct audits and reviews of the accuracy of our billing systems and other regulatory compliance matters. As a result of these reviews, we have
made, and will continue to make, disclosures to the HHS-OIG and CMS relating to amounts we suspect represent over-payments from these programs, whether due to inaccurate billing or otherwise. Some of these disclosures have resulted in, or may result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs.
Other Commitments—
We are a party to service and other contracts in connection with conducting our business. Minimum amounts due under these agreements are $60.4 million in 2025, $39.6 million in 2026, $31.6 million in 2027, $25.8 million in 2028, $21.8 million in 2029, and $50.9 million thereafter. These contracts primarily relate to software licensing and support.
v3.25.0.1
Segment Reporting
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting:
We manage our operations using one operating segment which is also our reportable segment: inpatient rehabilitation. Our national network of inpatient rehabilitation hospitals provide specialized rehabilitative treatment on an inpatient basis. Our inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations.
The accounting policies of our reportable segment are the same as those described in Note 1, Summary of Significant Accounting Policies. All revenues for our services are generated through external customers. See Note 1, Summary of Significant Accounting Policies, “Net Operating Revenues,” for the disaggregation of our revenues. Our chief operating decision maker (“CODM”) is the chief executive officer. Our CODM evaluates the performance and allocates resources based on adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”). Our CODM primarily considers forecast-to-budget variances and current year actuals to prior year actuals variances to assess performance and to help inform operating decisions, including allocating resources.
Selected financial information, including significant segment expenses, for our reportable segment is as follows (in millions):
For the Year Ended December 31,
202420232022
Net operating revenues$5,373.2 $4,801.2 $4,348.6 
Less:
Salaries and benefits2,901.0 2,600.1 2,393.3 
Other operating expenses785.2 709.3 665.6 
Supplies239.0 218.3 202.1 
Occupancy costs57.3 56.3 54.7 
General and administrative expenses156.1 146.5 130.4 
Net income attributable to noncontrolling interests148.2 113.2 93.6 
Other segment items(1)
(17.3)(13.6)(10.4)
Adjusted EBITDA$1,103.7 $971.1 $819.3 
(1)Includes interest income, investment gain or loss, and equity in net income of nonconsolidated affiliates.
Segment reconciliation (in millions):
For the Year Ended December 31,
202420232022
Adjusted EBITDA$1,103.7 $971.1 $819.3 
Stock-based compensation(48.3)(50.6)(29.2)
Depreciation and amortization(299.6)(273.9)(243.6)
Loss on disposal or impairment of assets(17.4)(9.8)(4.8)
Loss on early extinguishment of debt(0.6)— (1.4)
Interest expense and amortization of debt discounts and fees(137.4)(143.5)(175.7)
Net income attributable to noncontrolling interests140.9 111.0 93.6 
Change in fair market value of equity securities1.0 0.7 (7.4)
Asset impairment impact on noncontrolling interests7.3 — — 
State regulatory change impact on noncontrolling interests— 2.2 — 
Income from continuing operations before income tax expense$749.6 $607.2 $450.8 
Additional detail regarding the revenues of our operating segment by service line follows (in millions):
For the Year Ended December 31,
202420232022
Net operating revenues:
Inpatient$5,230.5 $4,693.8 $4,251.6 
Outpatient and other142.7 107.4 97.0 
Net operating revenues$5,373.2 $4,801.2 $4,348.6 
Equity in net income of consolidated affiliates and the Provision for income tax expense are reported on our consolidated statements of comprehensive income. Segment assets are reported on our consolidated balance sheets as Total assets. Segment capital expenditures are reported on our consolidated statements of cash flows as Purchases of property, equipment, and intangible assets
v3.25.0.1
Pay vs Performance Disclosure - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Pay vs Performance Disclosure      
Net income attributable to Encompass Health $ 455.7 $ 352.0 $ 271.0
v3.25.0.1
Insider Trading Arrangements
 3 Months Ended
Dec. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.25.0.1
Insider Trading Policies and Procedures
 12 Months Ended
Dec. 31, 2024
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.0.1
Cybersecurity Risk Management and Strategy Disclosure
 12 Months Ended
Dec. 31, 2024
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]
The proper function, availability, and security of our and third-party information systems are critical to our business. We have attempted to structure our cybersecurity program and its incident response policies and procedures, including an incident response plan (the “IRP”), around the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, which provides best practices to identify, protect from, respond to, and recover from cyber attacks. The cybersecurity program, led by our chief security officer (“CSO”), consists of dedicated internal IT security employees, including the staff of a security operations center, and long-term third-party security service providers. Our IT security staff, led by our CSO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response. In furtherance of our cybersecurity program, members of our internal security staff participate in industry and governmental cybersecurity cooperative groups, including the Health Information Sharing and Analysis Center (“H-ISAC”) and the FBI’s InfraGard.
Our CSO, who assumed his current role in 2022, has over 11 years of cybersecurity experience with us and over 28 total years of cybersecurity and IT experience across various industries, including telecom, engineering, and finance. He also holds several cybersecurity certifications: GIAC Certified Incident Handler, GIAC Certified Penetration Tester, and Certified Healthcare Information Security Leader. Our CSO reports directly to our chief information officer (“CIO”). Our CIO, who assumed his current role in 2011, has 35 total years of cybersecurity and IT experience. Prior to assuming the role of CIO, he served in senior IT and security roles for us beginning in 2001. As a highly decorated United States Air Force officer, he served as a CIO, regional CIO, and chief technology officer responsible for the USAF health system’s IT worldwide operations. He also served as a senior staff advisor to various levels of the United States Department of Defense’s military health system on strategic matters related to IT policy, procedures, procurement, solutions, and is a subject matter expert on cybersecurity. He has numerous professional certifications and affiliations, including a CERT Certificate in Cybersecurity Oversight from National Association of Corporate Directors’ Cyber-Risk Oversight Program; Certified Information Systems Security Professional; lifetime member, fellow, and previous board member of the College of Health Information Management Executives.
We maintain an inter-departmental privacy and security committee that oversees our programs and initiatives that seek to protect and secure patient information as well as our data and information systems. This committee is responsible for, among other things, administering our incident response policies and procedures and various training and awareness programs that promote good system security practices by employees. This committee consists of our CSO, CIO, deputy CIO, chief privacy officer, and director of information security and compliance as well as in house attorneys responsible for cybersecurity and securities matters. It currently meets monthly and as warranted by privacy and security events.
The IRP sets forth the strategy to prepare for cybersecurity threats and incidents and the processes and procedures to detect, analyze, contain, and recover after any actual or suspected cybersecurity incidents. The IRP also sets forth the internal reporting process for cybersecurity incidents. In the event of the detection of an actual or suspected cybersecurity incident, the IRP provides that our IT security staff score the incident based on established criteria and manage the incident pursuant to the standard operating procedures. Depending on the assessed criticality of the incident and the systems affected, the staff will report an incident to a security triage team, consisting of the security operations incident response lead and several members of the privacy and security committee. Working with our third-party security vendors as needed, the triage team investigates the incident, manages the response, and reports threats and incidents deemed significant to securities counsel. Securities counsel then works with the executive team to assess materiality for the Company. A member of the executive team would inform our board of directors as warranted.
In general terms, under our cybersecurity program, we undertake measures to protect the safety and security of our information systems and the data maintained within those systems. We have implemented administrative, technical and physical controls on our systems and devices in an attempt to prevent unauthorized access and to promote business resilience in the event of that access. Core elements of our program include the real-time monitoring of both our network and external cybersecurity activity by our internal security operations center and our third-party service providers and the procedures for backing up and recovering our systems. We periodically test the adequacy of our security, business continuity, and disaster recovery measures, including an annual tabletop exercise involving representatives from all key functional departments with the Company, our outside cybersecurity legal counsel, and our primary forensic services firm. Given the extensive practical experience of implementing our IRP and business continuity plan during the Change Healthcare incident, discussed further below, we did not conduct a separate mock tabletop exercise in 2024. Our legal and technical advisors direct the exercise and provide feedback on our performance, which is shared with management and our board of directors. We provide our employees annual training and regular reminders on measures they can take to prevent breaches and other cyber threats, including phishing schemes. We participate in the vulnerability scanning service offered by the Cybersecurity and Infrastructure Security Agency
on our internet facing systems and engage external security consultants to perform an annual penetration test of our network. Our systems that process electronic protected health information are risk assessed on a quarterly basis against NIST security controls. Additionally, we maintain insurance coverage for cybersecurity incidents.
Third-party Engagement in Connection with our Cybersecurity Program
We maintain ongoing engagements with our cybersecurity legal counsel and forensic services firms, each of which has visibility into current events through its client base. We engage throughout the year with not only our security vendors but also H-ISAC, the FBI’s InfraGard, and other communities dedicated to sharing information regarding developing cybersecurity threats.
Third-party IT Vendor Risk Management
Our IT security staff also maintains a third-party IT vendor risk management process. The staff identifies the third parties with whom we contract or otherwise have a relationship involving our network or digital assets that represent an elevated risk based on a detailed rating process. The IT vendor risk management process involves input from various departments, including the affected internal business constituencies, legal, and compliance.
Using a platform endorsed by the H-ISAC, the IT security staff performs risk assessments of third parties that appear to represent the greatest risk to our systems and data. Annually, the privacy and security committee reviews and approves our listing of tier one vendors subject to the assessment. The IT security staff then works with the internal points of contact responsible for the applications, software or systems and the vendors to gather the information necessary to assess the associated risks using common cybersecurity standards and frameworks. Any significant risks identified are shared with the vendors and the compensating controls for those risks are documented in collaboration with the vendors. The internal points of contact and other constituencies then review the results of the assessment process in order to assess the associated value of the product or service against the risk.
To date, we are not aware of having experienced a material compromise of our systems or networks from a cybersecurity incident. However, we routinely identify attempts to gain unauthorized access to our systems. Additionally, some of our vendors and business partners have experienced compromises of their information systems, including systems that we
use. On February 21, 2024, Change Healthcare, a subsidiary of UnitedHealth Group that acted as an intermediary for processing of our payment claims for all payors, notified us of a cybersecurity incident affecting some of its systems. In response to the incident, both we and Change Healthcare severed those business service connections between our systems and Change Healthcare’s. We promptly conducted forensics on our systems based on the shared information regarding this Change Healthcare incident and did not identify any compromise or unauthorized access of our systems or networks. However, the incident did affect our ability to submit any claims for payment for a period of time until we implemented alternative modes for submissions. We have not identified any compromise or unauthorized access of our systems or networks, and the temporary disruption to our submission of claims did not materially affect our business strategy, results of operation or financial condition.
Given the increasing cybersecurity threats in the healthcare industry, there can be no assurance we will not experience business interruptions; data loss, ransom, misappropriation or corruption, theft, or misuse of proprietary data, patient or other personally identifiable information; or litigation, investigation, or regulatory action related to any of those, any of which could have a material adverse effect on our patient care, ability to admit patients and to bill and collect for services provided on a timely basis, financial position, and results of operations and could harm our business reputation.
We expend significant capital to protect against cybersecurity threats, including denial of service attacks, email phishing schemes, hacking, advanced persistent threats, malware, and ransomware. Substantial additional expenditures may be required to respond to and remediate any problems caused by cybersecurity incidents, including the unauthorized access to or theft of patient data and protected health information stored in our information systems, the inoperability of our electronic clinical and business systems, and the infiltration or disruption of the information systems of our business vendors and partners. In the case of a material cybersecurity incident, the associated expenses and losses and lost revenue may exceed our current insurance coverage for such events. Some adverse consequences may not be insurable, such as reputational harm and third-party business interruption.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block] Assessing, identifying, and managing cybersecurity related risks are integrated into our overall enterprise risk management (the “ERM”) process. Cybersecurity risks are included in the risk universe that the ERM function evaluates to assess the most significant risks to the Company as a whole. To the extent the ERM process identifies a heightened cybersecurity related risk, risk owners are assigned to develop risk mitigation plans, which are then tracked to completion. Management presents quarterly the ERM risk assessment, including key risk indicators, to our board of directors.
Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block]
Our board of directors has actively sought out experience and expertise among its members to further its oversight of cybersecurity risk. We believe that Messrs. Carmichael and Reidy and Ms. Herman have extensive knowledge and experience to support cybersecurity oversight. Mr. Carmichael previously served as chief information officer at multiple companies, and Mr. Reidy directly supervised and oversaw the information security programs at two companies. Ms. Herman has completed the National Association of Corporate Directors’ Cyber-Risk Oversight Program, which is designed to enhance cybersecurity literacy and strengthen cyber-risk oversight practices, and holds a CERT Certificate in Cybersecurity Oversight.
The Compliance and Quality of Care Committee of our board of directors has primary responsibility for oversight of our cybersecurity risk management program. Our CIO provides quarterly reports on our cybersecurity program to that committee and at least annually to our full board. The reports to the committee and the full board include details and metrics on, among other things, our routine vulnerability assessments, internal and external threat intelligence, quarterly NIST framework assessments, quarterly Company-wide phishing exercises and training, device encryption, routine resilience efforts including quarterly disaster recovery exercises, third-party vendor risk management, annual tabletop incident response exercise, annual business continuity exercise, cyber penetration tests, and 23 NIST cyber hygiene controls. Similarly, our chief compliance officer provides quarterly reports to the Compliance and Quality of Care Committee on patient privacy compliance efforts and related matters. The Compliance and Quality of Care Committee and the full board review, and the committee approves, the annual cybersecurity plan that sets out the primary initiatives and internal audits of the IT security function for the upcoming year. Historically, one or more board members have observed and participated in our tabletop incident response exercises.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] The Compliance and Quality of Care Committee of our board of directors has primary responsibility for oversight of our cybersecurity risk management program.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] Our CIO provides quarterly reports on our cybersecurity program to that committee and at least annually to our full board.
Cybersecurity Risk Role of Management [Text Block] The cybersecurity program, led by our chief security officer (“CSO”), consists of dedicated internal IT security employees, including the staff of a security operations center, and long-term third-party security service providers. Our IT security staff, led by our CSO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response. In furtherance of our cybersecurity program, members of our internal security staff participate in industry and governmental cybersecurity cooperative groups, including the Health Information Sharing and Analysis Center (“H-ISAC”) and the FBI’s InfraGard.
Our CSO, who assumed his current role in 2022, has over 11 years of cybersecurity experience with us and over 28 total years of cybersecurity and IT experience across various industries, including telecom, engineering, and finance. He also holds several cybersecurity certifications: GIAC Certified Incident Handler, GIAC Certified Penetration Tester, and Certified Healthcare Information Security Leader. Our CSO reports directly to our chief information officer (“CIO”). Our CIO, who assumed his current role in 2011, has 35 total years of cybersecurity and IT experience. Prior to assuming the role of CIO, he served in senior IT and security roles for us beginning in 2001. As a highly decorated United States Air Force officer, he served as a CIO, regional CIO, and chief technology officer responsible for the USAF health system’s IT worldwide operations. He also served as a senior staff advisor to various levels of the United States Department of Defense’s military health system on strategic matters related to IT policy, procedures, procurement, solutions, and is a subject matter expert on cybersecurity. He has numerous professional certifications and affiliations, including a CERT Certificate in Cybersecurity Oversight from National Association of Corporate Directors’ Cyber-Risk Oversight Program; Certified Information Systems Security Professional; lifetime member, fellow, and previous board member of the College of Health Information Management Executives.
We maintain an inter-departmental privacy and security committee that oversees our programs and initiatives that seek to protect and secure patient information as well as our data and information systems. This committee is responsible for, among other things, administering our incident response policies and procedures and various training and awareness programs that promote good system security practices by employees. This committee consists of our CSO, CIO, deputy CIO, chief privacy officer, and director of information security and compliance as well as in house attorneys responsible for cybersecurity and securities matters. It currently meets monthly and as warranted by privacy and security events.
The IRP sets forth the strategy to prepare for cybersecurity threats and incidents and the processes and procedures to detect, analyze, contain, and recover after any actual or suspected cybersecurity incidents. The IRP also sets forth the internal reporting process for cybersecurity incidents. In the event of the detection of an actual or suspected cybersecurity incident, the IRP provides that our IT security staff score the incident based on established criteria and manage the incident pursuant to the standard operating procedures. Depending on the assessed criticality of the incident and the systems affected, the staff will report an incident to a security triage team, consisting of the security operations incident response lead and several members of the privacy and security committee. Working with our third-party security vendors as needed, the triage team investigates the incident, manages the response, and reports threats and incidents deemed significant to securities counsel. Securities counsel then works with the executive team to assess materiality for the Company. A member of the executive team would inform our board of directors as warranted.
In general terms, under our cybersecurity program, we undertake measures to protect the safety and security of our information systems and the data maintained within those systems. We have implemented administrative, technical and physical controls on our systems and devices in an attempt to prevent unauthorized access and to promote business resilience in the event of that access. Core elements of our program include the real-time monitoring of both our network and external cybersecurity activity by our internal security operations center and our third-party service providers and the procedures for backing up and recovering our systems. We periodically test the adequacy of our security, business continuity, and disaster recovery measures, including an annual tabletop exercise involving representatives from all key functional departments with the Company, our outside cybersecurity legal counsel, and our primary forensic services firm. Given the extensive practical experience of implementing our IRP and business continuity plan during the Change Healthcare incident, discussed further below, we did not conduct a separate mock tabletop exercise in 2024. Our legal and technical advisors direct the exercise and provide feedback on our performance, which is shared with management and our board of directors. We provide our employees annual training and regular reminders on measures they can take to prevent breaches and other cyber threats, including phishing schemes. We participate in the vulnerability scanning service offered by the Cybersecurity and Infrastructure Security Agency
on our internet facing systems and engage external security consultants to perform an annual penetration test of our network. Our systems that process electronic protected health information are risk assessed on a quarterly basis against NIST security controls. Additionally, we maintain insurance coverage for cybersecurity incidents.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] The cybersecurity program, led by our chief security officer (“CSO”), consists of dedicated internal IT security employees, including the staff of a security operations center, and long-term third-party security service providers. Our IT security staff, led by our CSO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response.
Cybersecurity Risk Management Expertise of Management Responsible [Text Block]
Our CSO, who assumed his current role in 2022, has over 11 years of cybersecurity experience with us and over 28 total years of cybersecurity and IT experience across various industries, including telecom, engineering, and finance. He also holds several cybersecurity certifications: GIAC Certified Incident Handler, GIAC Certified Penetration Tester, and Certified Healthcare Information Security Leader. Our CSO reports directly to our chief information officer (“CIO”). Our CIO, who assumed his current role in 2011, has 35 total years of cybersecurity and IT experience. Prior to assuming the role of CIO, he served in senior IT and security roles for us beginning in 2001. As a highly decorated United States Air Force officer, he served as a CIO, regional CIO, and chief technology officer responsible for the USAF health system’s IT worldwide operations. He also served as a senior staff advisor to various levels of the United States Department of Defense’s military health system on strategic matters related to IT policy, procedures, procurement, solutions, and is a subject matter expert on cybersecurity. He has numerous professional certifications and affiliations, including a CERT Certificate in Cybersecurity Oversight from National Association of Corporate Directors’ Cyber-Risk Oversight Program; Certified Information Systems Security Professional; lifetime member, fellow, and previous board member of the College of Health Information Management Executives.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] The cybersecurity program, led by our chief security officer (“CSO”), consists of dedicated internal IT security employees, including the staff of a security operations center, and long-term third-party security service providers. Our IT security staff, led by our CSO, is responsible for our overall information security strategy, policy, security engineering, operations, and cyber threat detection and response. In furtherance of our cybersecurity program, members of our internal security staff participate in industry and governmental cybersecurity cooperative groups, including the Health Information Sharing and Analysis Center (“H-ISAC”) and the FBI’s InfraGard.
Our CSO, who assumed his current role in 2022, has over 11 years of cybersecurity experience with us and over 28 total years of cybersecurity and IT experience across various industries, including telecom, engineering, and finance. He also holds several cybersecurity certifications: GIAC Certified Incident Handler, GIAC Certified Penetration Tester, and Certified Healthcare Information Security Leader. Our CSO reports directly to our chief information officer (“CIO”). Our CIO, who assumed his current role in 2011, has 35 total years of cybersecurity and IT experience. Prior to assuming the role of CIO, he served in senior IT and security roles for us beginning in 2001. As a highly decorated United States Air Force officer, he served as a CIO, regional CIO, and chief technology officer responsible for the USAF health system’s IT worldwide operations. He also served as a senior staff advisor to various levels of the United States Department of Defense’s military health system on strategic matters related to IT policy, procedures, procurement, solutions, and is a subject matter expert on cybersecurity. He has numerous professional certifications and affiliations, including a CERT Certificate in Cybersecurity Oversight from National Association of Corporate Directors’ Cyber-Risk Oversight Program; Certified Information Systems Security Professional; lifetime member, fellow, and previous board member of the College of Health Information Management Executives.
We maintain an inter-departmental privacy and security committee that oversees our programs and initiatives that seek to protect and secure patient information as well as our data and information systems. This committee is responsible for, among other things, administering our incident response policies and procedures and various training and awareness programs that promote good system security practices by employees. This committee consists of our CSO, CIO, deputy CIO, chief privacy officer, and director of information security and compliance as well as in house attorneys responsible for cybersecurity and securities matters. It currently meets monthly and as warranted by privacy and security events.
The IRP sets forth the strategy to prepare for cybersecurity threats and incidents and the processes and procedures to detect, analyze, contain, and recover after any actual or suspected cybersecurity incidents. The IRP also sets forth the internal reporting process for cybersecurity incidents. In the event of the detection of an actual or suspected cybersecurity incident, the IRP provides that our IT security staff score the incident based on established criteria and manage the incident pursuant to the standard operating procedures. Depending on the assessed criticality of the incident and the systems affected, the staff will report an incident to a security triage team, consisting of the security operations incident response lead and several members of the privacy and security committee. Working with our third-party security vendors as needed, the triage team investigates the incident, manages the response, and reports threats and incidents deemed significant to securities counsel. Securities counsel then works with the executive team to assess materiality for the Company. A member of the executive team would inform our board of directors as warranted.
In general terms, under our cybersecurity program, we undertake measures to protect the safety and security of our information systems and the data maintained within those systems. We have implemented administrative, technical and physical controls on our systems and devices in an attempt to prevent unauthorized access and to promote business resilience in the event of that access. Core elements of our program include the real-time monitoring of both our network and external cybersecurity activity by our internal security operations center and our third-party service providers and the procedures for backing up and recovering our systems. We periodically test the adequacy of our security, business continuity, and disaster recovery measures, including an annual tabletop exercise involving representatives from all key functional departments with the Company, our outside cybersecurity legal counsel, and our primary forensic services firm. Given the extensive practical experience of implementing our IRP and business continuity plan during the Change Healthcare incident, discussed further below, we did not conduct a separate mock tabletop exercise in 2024. Our legal and technical advisors direct the exercise and provide feedback on our performance, which is shared with management and our board of directors. We provide our employees annual training and regular reminders on measures they can take to prevent breaches and other cyber threats, including phishing schemes. We participate in the vulnerability scanning service offered by the Cybersecurity and Infrastructure Security Agency
on our internet facing systems and engage external security consultants to perform an annual penetration test of our network. Our systems that process electronic protected health information are risk assessed on a quarterly basis against NIST security controls. Additionally, we maintain insurance coverage for cybersecurity incidents.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.0.1
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation and Consolidation
Basis of Presentation and Consolidation—
The accompanying consolidated financial statements of Encompass Health and its subsidiaries were prepared in accordance with generally accepted accounting principles in the United States of America and include the assets, liabilities, revenues, and expenses of all wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control, and, when applicable, entities in which we have a controlling financial interest. Certain prior year amounts may have been reclassified for comparative purposes to conform to the current-year financial statement presentation.
We use the equity method to account for our investments in entities we do not control, but where we have the ability to exercise significant influence over operating and financial policies. Consolidated Net income attributable to Encompass Health includes our share of the net earnings of these entities. The difference between consolidation and the equity method impacts certain of our financial ratios because of the presentation of the detailed line items reported in the consolidated financial statements for consolidated entities compared to a one line presentation of equity method investments.
We eliminate all significant intercompany accounts and transactions from our financial results.
Variable Interest Entities
Variable Interest Entities—
Any entity considered a variable interest entity (“VIE”) is evaluated to determine which party is the primary beneficiary and thus should consolidate the VIE. This analysis is complex, involves uncertainties, and requires significant judgment on various matters. In order to determine if we are the primary beneficiary of a VIE, we must determine what activities most significantly impact the economic performance of the entity, whether we have the power to direct those activities, and if our obligation to absorb losses or receive benefits from the VIE could potentially be significant to the VIE.
Use of Estimates and Assumptions
Use of Estimates and Assumptions—
The preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) revenue reserves for contractual adjustments and uncollectible amounts; (2) fair value of acquired assets and assumed liabilities in business combinations; (3) asset impairments, including goodwill; (4) depreciable lives of assets; (5) useful lives of intangible assets; (6) economic lives and fair value of leased assets; (7) income tax valuation allowances; (8) uncertain tax positions; (9) fair value of stock options and restricted stock containing a market condition; (10) fair value of redeemable noncontrolling interests; (11) reserves for self-insured healthcare plans; (12) reserves for professional, workers’ compensation, and comprehensive general insurance liability risks; and (13) contingency and litigation reserves. Future events and their effects cannot be predicted with certainty; accordingly, our accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of our consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as our operating environment changes. We evaluate and update our assumptions and estimates on an ongoing basis and may employ outside experts to assist in our evaluation, as considered necessary. Actual results could differ from those estimates.
Net Operating Revenues
We record Net operating revenues on an accrual basis using our best estimate of the transaction price for the type of service provided to the patient. Our estimate of the transaction price includes estimates of price concessions for such items as contractual allowances, potential adjustments that may arise from payment and other reviews, and uncollectible amounts. Our accounting systems calculate contractual allowances on a patient-by-patient basis based on the rates in effect for each primary third-party payor. Adjustments related to payment reviews by third-party payors or their agents are based on our historical experience and success rates in the claims adjudication process. Estimates for uncollectible amounts are based on the aging of our accounts receivable, our historical collection experience for each type of payor, and other relevant factors.
Management continually reviews the revenue transaction price estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms that result from contract renegotiations and renewals. Due to complexities involved in determining amounts ultimately due under reimbursement arrangements with third-party payors, which are often subject to interpretation, we may receive reimbursement for healthcare services authorized and provided that is different from our estimates, and such differences could be material. In addition, laws and regulations governing the Medicare and Medicaid programs are complex, subject to interpretation, and are routinely modified for provider reimbursement. All healthcare providers participating in the Medicare and Medicaid programs are required to meet certain financial reporting requirements. Federal regulations require submission of annual cost reports covering medical costs and expenses associated with the services provided under each hospital provider number to program beneficiaries. Annual cost reports required under the Medicare and Medicaid programs are subject to routine audits, which may result in adjustments to the amounts ultimately determined to be due to Encompass Health under these reimbursement programs. These audits often require several years to reach the final determination of amounts earned under the programs. If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material.
The Centers for Medicare & Medicaid Services (“CMS”) has been granted authority to suspend payments, in whole or in part, to Medicare providers if CMS possesses reliable information an overpayment, fraud, or willful misrepresentation exists. If CMS suspects payments are being made as the result of fraud or misrepresentation, CMS may suspend payment at any time without providing prior notice to us. The initial suspension period is limited to 180 days. However, the payment suspension period can be extended almost indefinitely if the matter is under investigation by the United States Department of Health and Human Services Office of Inspector General (the “HHS-OIG”) or the United States Department of Justice (the “DOJ”). Therefore, we are unable to predict if or when we may be subject to a suspension of payments by the Medicare and/or Medicaid programs, the possible length of the suspension period, or the potential cash flow impact of a payment suspension. Any such suspension would adversely impact our financial position, results of operations, and cash flows.
Pursuant to legislative directives and authorizations from Congress, CMS has developed and instituted various Medicare audit programs under which CMS contracts with private companies to conduct claims and medical record audits. As a matter of course, we undertake significant efforts through training and education to ensure compliance with Medicare requirements. However, past audits have led, and future audits may lead, to assertions we have been underpaid or overpaid by Medicare or submitted improper claims in some instances. Ultimately, audits may require us to refund any amounts determined to have been overpaid. Audits also require us to incur additional costs to respond to requests for records and defend the validity of payments and claims. In some circumstances auditors assert the authority to extrapolate denial rationales to large pools of claims not actually audited, which could increase the impact of the audit. We cannot predict when or how these audit programs will affect us.
Medicare Administrative Contractors (“MACs”), under programs known as “widespread probes,” have conducted pre-payment claim reviews of our Medicare billings and in some cases denied payment for certain diagnosis codes. We dispute, or “appeal,” most of these denials. As discussed above, our historical experience and success in the adjudication of these appeals is a component of our estimate of transaction price. The Medicare appeals adjudication process is administered by the Office of Medicare Hearings and Appeals (“OMHA”) and has been subject to significant delay resulting in a backlog of claims awaiting adjudication. Beginning in March 2020, OMHA increased the frequency of hearings and the number of claims set at each hearing, which we believe adds to the substantive and procedural deficiencies in the appeals process. During 2022, the backlog of “widespread probe” claims adjudicated by the administrative law judge (“ALJ”) continued and were substantially resolved. This OMHA practice resulted in a reduction in our success in the adjudication of these appeals, but have increased the pace of recovery of these claims. We have appealed certain adverse ALJ rulings to the Department Appeals Board (“DAB”), the final level of administrative review. As of December 31, 2024, approximately $4 million and $30 million in denied claims are awaiting review at the ALJ and DAB levels, respectively. In addition, we have appealed approximately $7 million in claims denied by the DAB pending review by the United States district courts as of December 31, 2024.
During the fourth quarter of 2023, we recorded an additional reserve totaling $21.9 million related to appeals pending before the DAB and several federal district courts. The increase in reserve was driven primarily by an increase in unfavorable adjudication outcomes experienced at the DAB during the second half of 2023 and largely offsets the remaining net carrying value of these claims. These appeals related primarily to claims denied prior to 2018. This adjustment did not impact our reserve methodology for ongoing claims audit programs, including TPE and IRF RCD (defined and discussed below). We will continue to pursue ongoing appeals before the DAB and federal district courts where economically beneficial.
Under CMS’s Targeted Probe and Educate (“TPE”) program, MACs use data analysis to identify healthcare providers with unusual billing practices, high claim error rates, and items and services that have high national error rates. Once a MAC selects a provider for claims review, the initial volume of claims review is limited to 20 to 40 claims. The TPE program includes up to three rounds of claims review if necessary with corresponding provider education and a subsequent period to allow for improvement. If results do not improve sufficiently after three rounds, the MAC may refer the provider to CMS for further action, which may include extrapolation of error rates to a broader universe of claims or referral to a UPIC or RAC (defined below). We cannot predict the impact of the TPE program on our ability to collect claims on a timely basis.
On December 14, 2020, CMS announced a five-year review choice demonstration for inpatient rehabilitation services (the “IRF RCD”), under which Medicare reimbursement claims are assessed for compliance with applicable coverage and clinical documentation requirements. In August 2023, IRFs located in Alabama began participation in IRF RCD. On March 1, 2024, CMS announced the expansion of IRF RCD, effective June 17, 2024, to include IRFs located in Pennsylvania and billing to a certain MAC. We do not bill to that MAC, so we are not subject to the program in Pennsylvania at this time. CMS plans to
expand IRF RCD further to Texas and California, but the timing for doing so is not known. CMS also intends to expand the IRF RCD program after the initial four state rollout but has yet to provide details of that expansion.
Under the IRF RCD, participating IRFs have an initial choice between pre-claim or post-payment review of 100% of Medicare claims submitted to demonstrate compliance with applicable requirements during the first six-month review period or cycle. We elected the pre-claim review option for our IRFs in Alabama for the first cycle. Under the pre-claim review choice, services can begin prior to the submission of the review request and continue while the decision is being made. The pre-claim review request with required documentation must be submitted, reviewed, and approved before the final claim is paid. If a certain percentage of the claims reviewed are found to be valid, the IRF may then opt out of the 100% review. The opt-out validation percentages for the second and third cycles were 85% or greater and 90% or greater, respectively. In opting out, the IRF may elect spot prepayment reviews of samples consisting of 5% of total claims or selective post-payment review of a statistically valid random sample. Our claim validation rate for the first cycle ending in February 2024 exceeded the required 80% at our IRFs in Alabama. For the second cycle, which began on May 1, 2024, we elected not to opt out, so our IRFs in Alabama remained subject to the 100% pre-claim review. None of our IRFs in Alabama achieved the 85% claim validation rate for the second cycle ending in October 2024. We believe many of the non-affirmations in the second cycle were based on application of improper standards or requirements that directly conflict with the Medicare coverage criteria for IRFs. In the third cycle, we are again submitting 100% of review requests pre-claim. We have engaged, and will continue to engage, with the MAC and CMS to ensure the review process is consistent with existing rules, regulations and statutes. Given the inconsistent review process applied by the MAC across the previous two cycles, we cannot predict the impact, if any, IRF RCD may have on the collectability of our Medicare claims over its five-year term and ultimately our financial position, results of operations, and cash flows.
In connection with CMS approved and announced Recovery Audit Contractors (“RACs”) audits related to IRFs, we received requests from 2013 to 2024 to review certain patient files for discharges occurring from 2010 to 2024. These RAC audits are focused on identifying Medicare claims that may contain improper payments. RAC contractors must have CMS approval before conducting these focused reviews which cover issues ranging from billing documentation to medical necessity. Medical necessity is an assessment by an independent physician of a patient’s ability to tolerate and benefit from intensive multi-disciplinary therapy provided in an IRF setting.
CMS has also established other types of contractors, including the Unified Program Integrity Contractors (“UPICs”) and the Supplemental Medical Review Contractor (“SMRC”). The UPICs conduct audits with a focus on potential fraud and abuse issues. Like the RACs, the UPICs conduct audits and have the ability to refer matters to the HHS-OIG or the DOJ. Unlike RACs, UPICs do not receive a specific financial incentive based on the amount of the error as a result of UPIC audits. We have, from time to time, received UPIC record requests which have resulted in claim denials on paid claims. We have appealed substantially all UPIC denials arising from these audits using the same process we follow for appealing other denials by contractors. As of December 31, 2024, we have appealed $18.0 million of overpayment determination related to one UPIC audit to the DAB, challenging both the denials and the improper use of extrapolation. It is not possible to predict when this matter will be resolved or the ultimate outcome. The SMRC conducts nationwide medical reviews of Medicare claims to determine compliance with coverage, coding, payment, and billing requirements. During the first quarter of 2023, the SMRC initiated a review of a subset of claims from March 2020 through December 2020 totaling approximately $21 million. We have received initial results for the claims under review and, as of December 31, 2024, approximately 89% of these have been approved with $0.1 million still under appeal.
To date, the Medicare claims that are subject to these post-payment audit requests represent less than 1% of our Medicare patient discharges from 2010 to 2024. Because we have confidence in the medical judgment of both the referring and admitting physicians who assess the treatment needs of their patients, we have appealed substantially all claim denials arising from these audits using the same process we follow for appealing denials by MACs. Due to the delays announced by CMS in the related adjudication process discussed above, we believe the resolution of any claims that are subsequently denied as a result of these claim audits could take several years. In addition, because we have limited experience with UPICs and RACs in the context of claims reviews of this nature, we cannot provide assurance as to the timing or outcomes of these disputes. As such, we make estimates for these claims based on our historical experience and success rates in the claims adjudication process, which is the same process we follow for denials by MACs. During 2024, 2023, and 2022, our adjustment to Net operating revenues for claims that are part of this post-payment claims review process was not material.
Our performance obligations relate to contracts with a duration of less than one year. Therefore, we elected to apply the optional exemption to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. These unsatisfied or partially unsatisfied performance obligations primarily relate to services provided at the end of the reporting period.
We are subject to changes in government legislation that could impact Medicare payment levels and changes in payor patterns that may impact the level and timing of payments for services rendered.
Net operating revenues are recognized over time as the services are provided to the patient. The performance obligation is the rendering of services to the patient during the term of their inpatient stay. Revenues are recognized (or measured) using the input method as therapy, nursing, and auxiliary services are provided based on our estimate of the respective transaction price. Revenues recognized are subject to a number of elements which impact both the overall amount of revenue realized as well as the timing of the collection of the related accounts receivable. Factors considered in determining the estimated transaction price include the patient’s total length of stay for in-house patients, each patient’s discharge destination, the proportion of patients with secondary insurance coverage and the level of reimbursement under that secondary coverage, and the amount of charges that will be disallowed by payors. Such additional factors are assumed to remain consistent with the experience for patients discharged in similar time periods for the same payor classes.
Cash and Cash Equivalents
Cash and Cash Equivalents—
Cash and cash equivalents include highly liquid investments with maturities of three months or less when purchased. Carrying values of Cash and cash equivalents approximate fair value due to the short-term nature of these instruments.
We maintain amounts on deposit with various financial institutions, which may, at times, exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and we have not experienced any losses on such deposits.
Marketable Securities
Marketable Securities—
We record all equity securities with readily determinable fair values and for which we do not exercise significant influence at fair value and record the change in fair value for the reporting period in our consolidated statements of comprehensive income.
Accounts Receivable
Accounts Receivable—
We report accounts receivable from services rendered at their estimated transaction price which takes into account price concessions from federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies, workers’ compensation programs, employers, and patients. Our accounts receivable are concentrated by type of payor. The concentration of patient service accounts receivable by payor class, as a percentage of total patient service accounts receivable, is as follows:
 As of December 31,
 20242023
Medicare55.5 %57.6 %
Managed care and other discount plans, including Medicare Advantage34.3 %32.3 %
Medicaid4.0 %4.0 %
Other third-party payors2.8 %2.7 %
Workers' compensation2.6 %2.5 %
Patients0.8 %0.9 %
Total100.0 %100.0 %
While revenues and accounts receivable from the Medicare program are significant to our operations, we do not believe there are significant credit risks associated with this government agency. We do not believe there are any other
significant concentrations of revenues from any particular payor that would subject us to any significant credit risks in the collection of our accounts receivable.
Accounts requiring collection efforts are reviewed via system-generated work queues that automatically stage (based on age and size of outstanding balance) accounts requiring collection efforts for patient account representatives. Collection efforts include contacting the applicable party (both in writing and by telephone), providing information (both financial and clinical) to allow for payment or to overturn payor decisions to deny payment, and arranging payment plans with self-pay patients, among other techniques. When we determine all in-house efforts have been exhausted or it is a more prudent use of resources, accounts may be turned over to a collection agency.
The collection of outstanding receivables from Medicare, managed care payors, other third-party payors, and patients is our primary source of cash and is critical to our operating performance. While it is our policy to verify insurance prior to a patient being admitted, there are various exceptions that can occur. Such exceptions include instances where we are (1) unable to obtain verification because the patient’s insurance company was unable to be reached or contacted, (2) a determination is made that a patient may be eligible for benefits under various government programs, such as Medicaid, and it takes several days, weeks, or months before qualification for such benefits is confirmed or denied, and (3) the patient is transferred to our hospital from an acute care hospital without having access to a credit card, cash, or check to pay the applicable patient responsibility amounts (i.e., deductibles and co-payments).
Our primary collection risks relate to patient responsibility amounts and claims reviews conducted by MACs or other contractors. Patient responsibility amounts include accounts for which the patient was the primary payor or the primary insurance carrier has paid the amounts covered by the applicable agreement, but patient co-payment amounts remain outstanding. Changes in the economy, such as increased unemployment rates or periods of recession, can further exacerbate our ability to collect patient responsibility amounts.
If actual results are not consistent with our assumptions and judgments, we may be exposed to gains or losses that could be material. Changes in general economic conditions, business office operations, payor mix, or trends in federal or state governmental and private employer healthcare coverage could affect our collection of accounts receivable, financial position, results of operations, and cash flows.
Property and Equipment
Property and Equipment—
We report land, buildings, improvements, vehicles, and equipment at cost, net of accumulated depreciation and amortization and any asset impairments. We depreciate our assets using the straight-line method over the shorter of the estimated useful life of the assets or life of the underlying leases. Useful lives are generally as follows:
 Years
Buildings
10 to 30
Leasehold improvements
2 to 15
Vehicles
5
Furniture, fixtures, and equipment
3 to 10
Maintenance and repairs of property and equipment are expensed as incurred. We capitalize replacements and betterments that increase the estimated useful life of an asset. We capitalize pre-acquisition costs when they are directly identifiable with a specific property, the costs would be capitalizable if the property were already acquired, and acquisition of the property is probable. We capitalize interest expense on major construction and development projects while in progress.
We retain fully depreciated assets in property and accumulated depreciation accounts until we remove them from service. In the case of sale, retirement, or disposal, the asset cost and related accumulated depreciation balances are removed from the respective accounts, and the resulting net amount, less any proceeds, is included as a component of income from continuing operations in the consolidated statements of comprehensive income. However, if the sale, retirement, or disposal involves a discontinued operation, the resulting net amount, less any proceeds, is included in the results of discontinued operations.
Leases
Leases—
We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount the remaining lease payments in measuring the right-of-use asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the right-of-use asset and interest expense on the related lease liability. Certain of our lease agreements contain annual escalation clauses based on changes in the Consumer Price Index. The changes to the Consumer Price Index, as compared to our initial estimate at the lease commencement date, are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. In general, we do not account for lease and non-lease components separately for purposes of establishing right-of-use assets and lease liabilities.
Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheets. We recognize lease expense for these leases on a straight-line basis over the lease term.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets—
We are required to test our goodwill and indefinite-lived intangible asset for impairment at least annually, absent some triggering event that would accelerate an impairment assessment. Absent any impairment indicators, we perform this impairment testing as of October 1st of each year. We recognize an impairment charge for any amount by which the carrying amount of the asset exceeds its implied fair value. We present an impairment charge as a separate line item within income from continuing operations in the consolidated statements of comprehensive income, unless the impairment is associated with a discontinued operation. In that case, we include the impairment charge, on a net-of-tax basis, within the results of discontinued operations.
We assess qualitative factors in our single reporting unit to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative impairment test, we would determine the fair value of our reporting unit using generally accepted valuation techniques including the income approach and the market approach. The income approach includes the use of our reporting unit’s discounted projected operating results and cash flows. This approach includes many assumptions related to pricing and volume, operating expenses, capital expenditures, discount factors, tax rates, etc. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairment in future periods. We reconcile the estimated fair value of our reporting unit to our market capitalization. When we dispose of a hospital, goodwill is allocated to the gain or loss on disposition using the relative fair value methodology.
We assess qualitative factors related to our indefinite-lived intangible asset to determine whether it is necessary to perform the quantitative impairment test. If, based on this qualitative assessment, we were to believe we must perform the quantitative impairment test, we would determine the fair value of our indefinite-lived intangible asset using generally accepted valuation techniques including the relief-from-royalty method. This method is a form of the income approach in which value is equated to a series of cash flows and discounted at a risk-adjusted rate. It is based on a hypothetical royalty, calculated as a percentage of forecasted revenue, that we would otherwise be willing to pay to use the asset, assuming it were not already owned. This approach includes assumptions related to pricing and volume, as well as a royalty rate a hypothetical third party would be willing to pay for use of the asset. When making our royalty rate assumption, we consider rates paid in arms-length licensing transactions for assets comparable to our asset.
We amortize the cost of intangible assets with finite useful lives over their respective estimated useful lives to their estimated residual value. As of December 31, 2024, none of our finite useful lived intangible assets has an estimated residual value. We also review these assets for impairment whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount.
The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows:
 Estimated Useful Life
and Amortization Basis
Certificates of need
10 to 30 years using straight-line basis
Licenses
10 to 20 years using straight-line basis
Noncompete agreements
1 to 18 years using straight-line basis
Trade names:
Encompassindefinite-lived asset
All other
10 to 20 years using straight-line basis
Internal-use software
3 to 7 years using straight-line basis
Market access assets
20 years using accelerated basis
We capitalize the costs of obtaining or developing internal-use software, including external direct costs of material and services and certain directly related payroll costs. Amortization begins when the internal-use software is ready for its intended use. Costs incurred during the preliminary project and post-implementation stages, as well as maintenance and training costs, are expensed as incurred.
Impairment of Long-Lived Assets and Other Intangible Assets
Impairment of Long-Lived Assets and Other Intangible Assets—
We assess the recoverability of long-lived assets (excluding goodwill and our indefinite-lived asset) and identifiable acquired intangible assets with finite useful lives, whenever events or changes in circumstances indicate we may not be able to recover the asset’s carrying amount. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of the asset to the expected net future cash flows to be generated by that asset, or, for identifiable intangibles with finite useful lives, by determining whether the amortization of the intangible asset balance over its remaining life can be recovered through undiscounted future cash flows. The amount of impairment of identifiable intangible assets with finite useful lives, if any, to be recognized is measured based on projected discounted future cash flows. We measure the amount of impairment of other long-lived assets (excluding goodwill) as the amount by which the carrying value of the asset exceeds the fair market value of the asset, which is generally determined based on projected discounted future cash flows or appraised values. We classify long-lived assets to be disposed of other than by sale as held and used until they are disposed. We report long-lived assets to be disposed of by sale as held for sale and recognize those assets in the balance sheet at the lower of carrying amount or fair value less cost to sell, and we cease depreciation.
Financing Costs
Financing Costs—
We amortize financing costs using the effective interest method over the expected life of the related debt. Excluding financing costs related to our revolving line of credit (which are included in Other long-term assets), financing costs are presented as a direct deduction from the face amount of the financings. The related expense is included in Interest expense and amortization of debt discounts and fees in our consolidated statements of comprehensive income.
We accrete discounts and amortize premiums using the effective interest method over the expected life of the related debt, and we report discounts or premiums as a direct deduction from, or addition to, the face amount of the financing. The related income or expense is included in Interest expense and amortization of debt discounts and fees in our consolidated statements of comprehensive income.
Fair Value Measurements
Fair Value Measurements—
Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability.
The basis for these assumptions establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
•Level 1 – Observable inputs such as quoted prices in active markets;
•Level 2 – Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
•Level 3 – Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Assets and liabilities measured at fair value are based on one or more of three valuation techniques. The three valuation techniques are as follows:
•Market approach – Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;
•Cost approach – Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and
•Income approach – Techniques to convert future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing models, and lattice models).
Our financial instruments consist mainly of cash and cash equivalents, restricted cash, restricted marketable securities, accounts receivable, accounts payable, letters of credit, and long-term debt. The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximate fair value because of the short-term maturity of these instruments. The fair value of our letters of credit is deemed to be the amount of payment guaranteed on our behalf by third-party financial institutions. We determine the fair value of our long-term debt using quoted market prices, when available, or discounted cash flows based on various factors, including maturity schedules, call features, and current market rates.
On a recurring basis, we are required to report our restricted marketable securities at fair value. The fair values of our restricted marketable securities are determined based on quoted market prices in active markets or quoted prices, dealer quotations, or alternative pricing sources supported by observable inputs in markets that are not considered to be active.
In addition, there are assets and liabilities that are not required to be reported at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. The fair value of our property and equipment is determined using discounted cash flows and significant unobservable inputs, unless there is an offer to purchase such assets, which could be the basis for determining fair value. The fair value of our intangible assets, excluding goodwill, is determined using discounted cash flows and significant unobservable inputs. The fair value of our goodwill is determined using discounted projected operating results and cash flows, which involve significant unobservable inputs.
Noncontrolling Interests in Consolidated Affiliates and Redeemable Noncontrolling Interests
Noncontrolling Interests in Consolidated Affiliates—
The consolidated financial statements include all assets, liabilities, revenues, and expenses of less-than-100%-owned affiliates we control. Accordingly, we have recorded noncontrolling interests in the earnings and equity of such entities. We record adjustments to noncontrolling interests for the allocable portion of income or loss to which the noncontrolling interests holders are entitled based upon their portion of the subsidiaries they own. Distributions to holders of noncontrolling interests are adjusted to the respective noncontrolling interests holders’ balance.
Effective July 1, 2024, we expanded our existing joint venture with Piedmont Healthcare (“Piedmont”), which we control, by contributing the assets and operations of our previously wholly-owned 70-bed hospital in Augusta, Georgia. Piedmont contributed approximately $90 million on July 1, 2024, which indirectly resulted in Piedmont obtaining a 50% ownership interest in the hospital. As a result of this transaction, we recorded a post-tax gain of $23.2 million increasing Capital in excess of par value on the consolidated statement of shareholders’ equity for the year ended December 31, 2024. The
contribution from Piedmont is included in Contributions from noncontrolling interests of consolidated affiliates on the consolidated statement of cash flows for the year ended December 31, 2024.
Redeemable Noncontrolling Interests—
Certain of our joint venture agreements contain provisions that allow our partners to require us to purchase their interests in the joint venture at fair value at certain points in the future. Because these noncontrolling interests provide for redemption features that are not solely within our control, we classify them as Redeemable noncontrolling interests outside of permanent equity in our consolidated balance sheets. At the end of each reporting period, we compare the carrying value of the Redeemable noncontrolling interests to their estimated redemption value. If the estimated redemption value is greater than the current carrying value, the carrying value is adjusted to the estimated redemption value, with the adjustments recorded through equity in the line item Capital in excess of par value.
The fair value of our Redeemable noncontrolling interests in our joint venture entities is determined primarily using the income approach. The income approach includes the use of the joint venture entities’ projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the applicable joint venture entity, or Level 3 inputs. The projected operating results use management’s best estimates of economic and market conditions over the forecasted periods including assumptions for pricing and volume, operating expenses, and capital expenditures.
Share-Based Payments
Share-Based Payments—
Encompass Health has shareholder-approved stock-based compensation plans that provide for the granting of stock-based compensation to certain employees and directors. All share-based payments to employees are recognized in the financial statements based on their estimated grant-date fair value and amortized on a straight-line basis over the applicable requisite service period.
Litigation Reserves
Litigation Reserves—
We accrue for loss contingencies associated with outstanding litigation for which management has determined it is probable a loss contingency exists and the amount of loss can be reasonably estimated. If the accrued amount associated with a loss contingency is greater than $5.0 million, we also accrue estimated future legal fees associated with the loss contingency. This requires management to estimate the amount of legal fees that will be incurred in the defense of the litigation. These estimates are based on our expectations of the scope, length to complete, and complexity of the claims. In the future, additional adjustments may be recorded as the scope, length to complete, or complexity of outstanding litigation changes.
Advertising Costs
Advertising Costs—
We expense costs of print, radio, television, and other advertisements as incurred. Advertising expenses, primarily included in Other operating expenses within the accompanying consolidated statements of comprehensive income, were $5.8 million, $6.1 million, and $6.3 million in each of the years ended December 31, 2024, 2023, and 2022, respectively.
Income Taxes
Income Taxes—
We provide for income taxes using the asset and liability method. This approach recognizes the amount of income taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequence of events recognized in the consolidated financial statements and income tax returns. Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates.
A valuation allowance is required when it is more likely than not some portion of the deferred tax assets will not be realized. Realization is dependent on generating sufficient future taxable income in the applicable tax jurisdiction. On a quarterly basis, we assess the likelihood of realization of our deferred tax assets considering all available evidence, both positive and negative. Our most recent operating performance, the scheduled reversal of temporary differences, our forecast of taxable income in future periods by jurisdiction, our ability to sustain a core level of earnings, and the availability of prudent tax planning strategies are important considerations in our assessment.
We evaluate our tax positions and establish assets and liabilities in accordance with the applicable accounting guidance on uncertainty in income taxes. We review these tax uncertainties in light of changing facts and circumstances, such as the progress of tax audits, and adjust them accordingly. We have used the with-and-without method to determine when we will recognize excess tax benefits from stock-based compensation.
Encompass Health and its corporate subsidiaries file a consolidated federal income tax return. Some subsidiaries consolidated for financial reporting purposes are not part of the consolidated group for federal income tax purposes and file separate federal income tax returns. State income tax returns are filed on a separate, combined, or consolidated basis in accordance with relevant state laws and regulations. Partnerships, limited liability companies, and other pass-through entities we consolidate or account for using the equity method of accounting may file separate federal, state, and local income tax returns. We include the allocable portion of each pass-through entity’s income or loss in our federal income tax return. We allocate the remaining income or loss of each pass-through entity to the other partners or members who are responsible for their portion of the taxes.
Assets and Liabilities in and Results of Discontinued Operations
Assets and Liabilities in and Results of Discontinued Operations—
We report the disposal of the component, or group of components, as discontinued operations only when it represents a strategic shift that has, or will have, a major effect on our operations and financial results. In the period a component of an entity has been disposed of or classified as held for sale, we reclassify the results of operations for current and prior periods into a single caption titled (Loss) income from discontinued operations, net of tax. In addition, we classify the assets and liabilities of those components as current and noncurrent assets and liabilities within Other current assets, Other long-term assets, Other current liabilities, and Other long-term liabilities in our consolidated balance sheets. We also classify cash flows related to discontinued operations as one line item within each category of cash flows in our consolidated statements of cash flows.
Earnings per Common Share
Earnings per Common Share—
The calculation of earnings per common share is based on the weighted-average number of our common shares outstanding during the applicable period. The calculation for diluted earnings per common share recognizes the effect of all potential dilutive common shares that were outstanding during the respective periods, unless their impact would be antidilutive. The calculation of earnings per common share also considers the effect of participating securities. Stock-based compensation awards that contain nonforfeitable rights to dividends and dividend equivalents, such as our restricted stock units, are considered participating securities and are included in the computation of earnings per common share pursuant to the two-class method. In applying the two-class method, earnings are allocated to both common stock shares and participating securities based on their respective weighted-average shares outstanding for the period.
Treasury Stock
Treasury Stock—
Shares of common stock repurchased by us are recorded at cost as treasury stock. When shares are reissued, we use an average cost method to determine cost. The difference between the cost of the shares and the re-issuance price is added to or deducted from Capital in excess of par value. We account for the retirement of treasury stock as a reduction of retained earnings.
Comprehensive Income
Comprehensive Income—
Comprehensive income is comprised of Net income and changes in unrealized gains or losses on available-for-sale securities and is included in the consolidated statements of comprehensive income.
Recently Adopted Accounting Pronouncements/Recent Accounting Pronouncements Not Yet Adopted
Recently Adopted Accounting Pronouncements—
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires all public entities, including entities with a single reportable segment, to provide disclosure of (1) significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and
included within each reported measure of segment profit or loss, (2) the amount and description of the composition of other segment items which reconcile to segment profit or loss, and (3) the title and position of the entity’s CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and allocating resources. ASU 2023-07 was effective for us beginning January 1, 2024. The disclosures required are presented in Note 18, Segment Reporting.
Recent Accounting Pronouncements Not Yet Adopted—
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which intends to improve the transparency of income tax disclosures by requiring companies to (1) disclose consistent categories and greater disaggregation of information in the effective rate reconciliation and (2) provide information on income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted. We are required to apply the guidance prospectively but have the option to apply it retrospectively. We are currently evaluating the requirements of this standard and any potential impact it may have on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expense captions into specified categories within the notes to the financial statements for both interim and annual reporting periods. ASU 2024-03 is effective for our annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028. Early adoption is permitted. We are currently evaluating the requirements of this standard and any potential impact it may have on our consolidated financial statements.
We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our consolidated financial position, results of operations, or cash flows.
v3.25.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Schedule of Concentration of Net Operating Revenues by Payor
Our Net operating revenues disaggregated by payor source are as follows (in millions):
Year Ended December 31,
202420232022
Medicare$3,495.3 $3,126.1 $2,843.1 
Medicare Advantage
903.7 776.1 654.6 
Managed care
579.2 531.4 505.2 
Medicaid179.4 190.7 183.3 
Other third-party payors41.7 41.8 39.5 
Workers’ compensation27.8 25.8 24.7 
Patients15.9 14.9 16.6 
Other income130.2 94.4 81.6 
Total$5,373.2 $4,801.2 $4,348.6 
Schedule of Concentration of Net Operating Revenues and Net Patient Service Accounts Receivable by Payor and Payor Class The concentration of patient service accounts receivable by payor class, as a percentage of total patient service accounts receivable, is as follows:
 As of December 31,
 20242023
Medicare55.5 %57.6 %
Managed care and other discount plans, including Medicare Advantage34.3 %32.3 %
Medicaid4.0 %4.0 %
Other third-party payors2.8 %2.7 %
Workers' compensation2.6 %2.5 %
Patients0.8 %0.9 %
Total100.0 %100.0 %
Schedule of Useful Lives of Property and Equipment Useful lives are generally as follows:
 Years
Buildings
10 to 30
Leasehold improvements
2 to 15
Vehicles
5
Furniture, fixtures, and equipment
3 to 10
Property and equipment consists of the following (in millions):
 As of December 31,
 20242023
Land$302.6 $294.0 
Buildings3,859.3 3,402.8 
Leasehold improvements372.8 316.8 
Vehicles5.6 5.3 
Furniture, fixtures, and equipment808.8 723.3 
 5,349.1 4,742.2 
Less: Accumulated depreciation and amortization(2,111.9)(1,872.2)
 3,237.2 2,870.0 
Construction in progress405.9 431.0 
Property and equipment, net$3,643.1 $3,301.0 
Schedule of Estimated Useful Lives and Amortization Basis of Other Finite-lived Intangible Assets
The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows:
 Estimated Useful Life
and Amortization Basis
Certificates of need
10 to 30 years using straight-line basis
Licenses
10 to 20 years using straight-line basis
Noncompete agreements
1 to 18 years using straight-line basis
Trade names:
Encompassindefinite-lived asset
All other
10 to 20 years using straight-line basis
Internal-use software
3 to 7 years using straight-line basis
Market access assets
20 years using accelerated basis
The following table provides information regarding our other intangible assets (in millions):
 Gross Carrying AmountAccumulated AmortizationNet
Certificates of need:   
2024$131.4 $(49.0)$82.4 
2023120.9 (43.1)77.8 
Licenses:   
2024$65.7 $(56.4)$9.3 
202365.7 (55.4)10.3 
Noncompete agreements:   
2024$66.5 $(63.4)$3.1 
202366.7 (62.0)4.7 
Trade name - Encompass:
2024$135.2 $— $135.2 
2023135.2 — 135.2 
Trade names - all other:   
2024$39.6 $(23.6)$16.0 
202339.3 (22.2)17.1 
Internal-use software:   
2024$214.4 $(163.3)$51.1 
2023198.6 (166.4)32.2 
Market access assets:
2024$13.2 $(12.5)$0.7 
202313.2 (12.3)0.9 
Total intangible assets:   
2024$666.0 $(368.2)$297.8 
2023639.6 (361.4)278.2 
Schedule of Estimated Basis of Other Indefinite-lived Intangible Assets
The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows:
 Estimated Useful Life
and Amortization Basis
Certificates of need
10 to 30 years using straight-line basis
Licenses
10 to 20 years using straight-line basis
Noncompete agreements
1 to 18 years using straight-line basis
Trade names:
Encompassindefinite-lived asset
All other
10 to 20 years using straight-line basis
Internal-use software
3 to 7 years using straight-line basis
Market access assets
20 years using accelerated basis
v3.25.0.1
Spin Off of Home Health and Hospice Business (Tables)
 12 Months Ended
Dec. 31, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Summary of Financial Information Related to Discontinued Operations
The following table presents the results of operations of Enhabit as discontinued operations (in millions):
For the Year Ended December 31,
2022
Net operating revenue$542.3 
Operating expenses:
Salaries and benefits376.4 
Other operating expenses47.5 
Occupancy costs11.0 
Supplies11.7 
General and administrative expenses59.3 
Depreciation and amortization16.7 
Total operating expenses522.6 
Interest expense and amortization of debt discounts and fees0.2 
Income from discontinued operations before income taxes19.5 
Provision for income tax expense4.3 
Income from discontinued operations, net of tax15.2 
Less: Net income attributable to noncontrolling interests included in discontinued operations(1.3)
Net income attributable to Encompass Health included in discontinued operations$13.9 
v3.25.0.1
Variable Interest Entities (Tables)
 12 Months Ended
Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Variable Interest Entities
The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheets, are as follows (in millions):
As of December 31,
20242023
Assets 
Current assets: 
Cash and cash equivalents$0.4 $0.2 
Accounts receivable
34.5 36.7 
Other current assets9.6 5.0 
Total current assets44.5 41.9 
Property and equipment, net135.7 128.8 
Operating lease right-of-use assets1.3 1.4 
Goodwill15.9 15.9 
Intangible assets, net1.0 1.2 
Other long-term assets9.7 18.5 
Total assets$208.1 $207.7 
Liabilities
Current liabilities:
Current portion of long-term debt$1.0 $0.9 
Accounts payable6.2 7.6 
Accrued payroll11.0 9.4 
Other current liabilities12.7 9.3 
Total current liabilities30.9 27.2 
Long-term debt, net of current portion12.7 13.6 
Long-term operating lease liabilities1.4 1.4 
Total liabilities$45.0 $42.2 
v3.25.0.1
Cash and Marketable Securities (Tables)
 12 Months Ended
Dec. 31, 2024
Cash and Cash Equivalents [Abstract]  
Schedule of Investment Components
The components of our investments as of December 31, 2024 are as follows (in millions):
 Cash & Cash EquivalentsRestricted CashRestricted Marketable SecuritiesTotal
Cash$85.4 $37.7 $— $123.1 
Equity securities— — 130.9 130.9 
Total
$85.4 $37.7 $130.9 $254.0 
The components of our investments as of December 31, 2023 are as follows (in millions):
 Cash & Cash EquivalentsRestricted CashRestricted Marketable SecuritiesTotal
Cash$69.1 $35.1 $— $104.2 
Equity securities— — 126.2 126.2 
Total
$69.1 $35.1 $126.2 $230.4 
Schedule of Restricted Cash
Restricted cash consisted of the following (in millions):
 As of December 31,
 20242023
Current:
Affiliate cash
$17.9 $17.7 
Self-insured captive funds
19.8 17.1 
Other— 0.3 
Total restricted cash$37.7 $35.1 
v3.25.0.1
Accounts Receivable (Tables)
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Schedule of Accounts Receivable
Accounts receivable consists of the following (in millions):
 As of December 31,
 20242023
Current:
Patient accounts receivable
$593.0 $599.8 
Other accounts receivable5.8 11.8 
598.8 611.6 
Noncurrent patient accounts receivable
30.6 20.9 
Accounts receivable$629.4 $632.5 
v3.25.0.1
Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2024
Property, Plant and Equipment [Abstract]  
Schedule of Components of Property and equipment Useful lives are generally as follows:
 Years
Buildings
10 to 30
Leasehold improvements
2 to 15
Vehicles
5
Furniture, fixtures, and equipment
3 to 10
Property and equipment consists of the following (in millions):
 As of December 31,
 20242023
Land$302.6 $294.0 
Buildings3,859.3 3,402.8 
Leasehold improvements372.8 316.8 
Vehicles5.6 5.3 
Furniture, fixtures, and equipment808.8 723.3 
 5,349.1 4,742.2 
Less: Accumulated depreciation and amortization(2,111.9)(1,872.2)
 3,237.2 2,870.0 
Construction in progress405.9 431.0 
Property and equipment, net$3,643.1 $3,301.0 
v3.25.0.1
Leases (Tables)
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Schedule of Components of Least Costs
The components of lease costs are as follows (in millions):
For the Year Ended December 31,
202420232022
Operating lease cost $41.7 $40.9 $38.7 
Finance lease cost:
Amortization of right-of-use assets25.7 25.7 27.5 
Interest on lease liabilities24.7 26.2 29.0 
Total finance lease cost50.4 51.9 56.5 
Short-term and variable lease cost2.3 2.9 5.2 
Sublease income(3.1)(3.3)(2.9)
Total lease cost$91.3 $92.4 $97.5 
Schedule of Supplemental Balance Sheet Information Related to Leases
Supplemental consolidated balance sheet information related to leases is as follows (in millions):
As of December 31,
Classification20242023
Assets
Operating leaseOperating lease right-of-use assets$203.7 $208.5 
Finance lease (1)
Property and equipment, net221.5 247.2 
Total leased assets$425.2 $455.7 
Liabilities
Current liabilities:
Operating leaseCurrent operating lease liabilities$26.3 $24.1 
Finance leaseCurrent portion of long-term debt23.7 21.6 
Noncurrent liabilities:
Operating leaseLong-term operating lease liabilities189.7 196.1 
Finance leaseLong-term debt, net of current portion294.7 318.5 
Total leased liabilities$534.4 $560.3 
(1)    Finance lease assets are recorded net of accumulated amortization of $197.3 million and $171.6 million as of December 31, 2024 and 2023, respectively.
Schedule of Weighted Average Remaining Lease Term and Discount Rate
As of December 31,
20242023
Weighted Average Remaining Lease Term
Operating lease9.7 years9.5 years
Finance lease9.8 years10.7 years
Weighted Average Discount Rate
Operating lease6.4 %6.3 %
Finance lease7.7 %7.7 %
Schedule of Operating Lease, Liability, Maturity
Maturities of lease liabilities as of December 31, 2024 are as follows (in millions):
Year Ending December 31,Operating LeasesFinance
Leases
2025$38.9 $46.7 
202639.6 47.9 
202737.7 47.4 
202836.7 46.4 
202922.4 47.3 
2030 and thereafter121.5 222.9 
Total lease payments296.8 458.6 
Less: Interest portion(80.8)(140.2)
Total lease liabilities$216.0 $318.4 
Schedule of Finance Lease, Liability, Maturity
Maturities of lease liabilities as of December 31, 2024 are as follows (in millions):
Year Ending December 31,Operating LeasesFinance
Leases
2025$38.9 $46.7 
202639.6 47.9 
202737.7 47.4 
202836.7 46.4 
202922.4 47.3 
2030 and thereafter121.5 222.9 
Total lease payments296.8 458.6 
Less: Interest portion(80.8)(140.2)
Total lease liabilities$216.0 $318.4 
Schedule of Supplemental Cash Flow Information
Supplemental cash flow information related to our leases is as follows (in millions):
For the Year Ended December 31,
202420232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$40.7 $39.0 $40.5 
Operating cash flows from finance leases25.5 27.1 29.7 
Financing cash flows from finance leases21.8 41.1 19.2 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$26.7 $26.2 $48.7 
Finance leases— 21.4 1.0 
v3.25.0.1
Goodwill and Other Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Changes in the Carrying Amount of Goodwill
The following table shows changes in the carrying amount of Goodwill (in millions):
 Amount
Goodwill as of December 31, 2021$1,237.0 
Acquisitions26.2 
Goodwill as of December 31, 20221,263.2 
Acquisitions18.1 
Goodwill as of December 31, 20231,281.3 
Acquisitions2.7 
Goodwill as of December 31, 2024$1,284.0 
Schedule of Intangible Assets by Major Class
The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows:
 Estimated Useful Life
and Amortization Basis
Certificates of need
10 to 30 years using straight-line basis
Licenses
10 to 20 years using straight-line basis
Noncompete agreements
1 to 18 years using straight-line basis
Trade names:
Encompassindefinite-lived asset
All other
10 to 20 years using straight-line basis
Internal-use software
3 to 7 years using straight-line basis
Market access assets
20 years using accelerated basis
The following table provides information regarding our other intangible assets (in millions):
 Gross Carrying AmountAccumulated AmortizationNet
Certificates of need:   
2024$131.4 $(49.0)$82.4 
2023120.9 (43.1)77.8 
Licenses:   
2024$65.7 $(56.4)$9.3 
202365.7 (55.4)10.3 
Noncompete agreements:   
2024$66.5 $(63.4)$3.1 
202366.7 (62.0)4.7 
Trade name - Encompass:
2024$135.2 $— $135.2 
2023135.2 — 135.2 
Trade names - all other:   
2024$39.6 $(23.6)$16.0 
202339.3 (22.2)17.1 
Internal-use software:   
2024$214.4 $(163.3)$51.1 
2023198.6 (166.4)32.2 
Market access assets:
2024$13.2 $(12.5)$0.7 
202313.2 (12.3)0.9 
Total intangible assets:   
2024$666.0 $(368.2)$297.8 
2023639.6 (361.4)278.2 
Schedule of Amortization Expense, Intangible Assets
Amortization expense for other intangible assets is as follows (in millions):
 For the Year Ended December 31,
 202420232022
Amortization expense$28.8 $32.5 $28.8 
Schedule of Future Estimated Amortization Expense, Intangible Assets
Total estimated amortization expense for our other intangible assets for the next five years is as follows (in millions):
Year Ending December 31,Estimated
Amortization Expense
2025$25.4 
202623.0 
202716.3 
202812.2 
202910.7 
v3.25.0.1
Long-term Debt (Tables)
 12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Schedule of Outstanding Long-term Debt
Our long-term debt outstanding consists of the following (in millions):
 As of December 31,
 20242023
Credit Agreement—
Advances under revolving credit facility$20.0 $— 
Bonds payable—
5.75% Senior Notes due 2025
99.8 348.5 
4.50% Senior Notes due 2028
788.4 785.0 
4.75% Senior Notes due 2030
784.2 781.5 
4.625% Senior Notes due 2031
392.5 391.5 
Other notes payable94.5 66.0 
Finance lease obligations318.4 340.1 
 2,497.8 2,712.6 
Less: Current portion(138.6)(24.8)
Long-term debt, net of current portion$2,359.2 $2,687.8 
Our notes payable consist of the following (in millions):
As of December 31,
20242023Current Interest Rates
Sale/leaseback transactions involving real estate accounted for as financings
$28.0 $28.0 
9.2% to 13.4%
Construction of new hospitals47.6 38.0 
5.0% to 6.3%
Software contracts18.9 — 
5.5% to 6.5%
Other notes payable$94.5 $66.0 
Schedule of Debt Maturities
The following chart shows scheduled principal payments due on long-term debt for the next five years and thereafter (in millions):
Year Ending December 31,Face AmountNet Amount
2025$138.8 $138.6 
202639.4 39.4 
202766.1 66.1 
2028833.0 821.4 
202941.7 41.7 
Thereafter1,414.1 1,390.6 
Total$2,533.1 $2,497.8 
Schedule of Redemption Prices for Senior Notes We may redeem the 2028 Notes, in whole or in part, at any time on or after February 1, 2024 at the redemption prices set forth below:
PeriodRedemption
Price*
2024101.125 %
2025 and thereafter100.000 %
* Expressed in percentage of principal amount
We may redeem the 2030 Notes, in whole or in part, at any time on or after February 1, 2025 at the redemption prices set forth below:
PeriodRedemption
Price*
2025102.375 %
2026101.583 %
2027100.792 %
2028 and thereafter100.000 %
* Expressed in percentage of principal amount
We may redeem the 2031 Notes, in whole or in part, at any time on or after April 1, 2026 at the redemption prices set forth below:
PeriodRedemption
Price*
2026102.313 %
2027101.542 %
2028100.771 %
2029 and thereafter100.000 %
* Expressed in percentage of principal amount
v3.25.0.1
Self-Insured Risks (Tables)
 12 Months Ended
Dec. 31, 2024
Insurance [Abstract]  
Schedule of Self-Insurance Reserves
The following table presents the changes in our self-insurance reserves (in millions):
202420232022
Balance at beginning of period, gross$184.5 $175.1 $169.4 
Less: Reinsurance receivables
(36.4)(32.3)(30.0)
Balance at beginning of period, net148.1 142.8 139.4 
Increase for the provision of current year claims59.1 54.7 50.5 
Decrease for the provision of prior year claims(10.9)(10.5)(8.2)
Payments related to current year claims(6.9)(8.1)(7.1)
Payments related to prior year claims(32.2)(30.8)(31.8)
Balance at end of period, net157.2 148.1 142.8 
Add: Reinsurance receivables
37.6 36.4 32.3 
Balance at end of period, gross$194.8 $184.5 $175.1 
v3.25.0.1
Redeemable Noncontrolling Interests (Tables)
 12 Months Ended
Dec. 31, 2024
Noncontrolling Interest [Abstract]  
Schedule of Redeemable Noncontrolling Interest
The following is a summary of the activity related to our Redeemable noncontrolling interests (in millions):
For the Year Ended December 31,
202420232022
Balance at beginning of period$42.0 $35.6 $42.2 
Net income attributable to noncontrolling interests
5.1 8.3 7.2 
Distributions declared(10.2)(1.1)(5.3)
Contribution to joint ventures18.0 — — 
Change in fair value1.6 (0.8)(3.4)
Other— — 0.1 
Spin off of Enhabit, Inc.— — (5.2)
Balance at end of period$56.5 $42.0 $35.6 
Schedule of Reconciliation of Net Income Attributable to Noncontrolling Interests
The following table reconciles the net income attributable to nonredeemable Noncontrolling interests, as recorded in the shareholders’ equity section of the consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests, as recorded in the mezzanine section of the consolidated balance sheets, to the Net income attributable to noncontrolling interests presented in the consolidated statements of comprehensive income (in millions):
For the Year Ended December 31,
202420232022
Net income attributable to nonredeemable noncontrolling interests$135.8 $102.7 $87.7 
Net income attributable to redeemable noncontrolling interests5.1 8.3 7.2 
Net income attributable to noncontrolling interests$140.9 $111.0 $94.9 
v3.25.0.1
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions):
  Fair Value Measurements at Reporting Date Using
As of December 31, 2024Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Valuation Technique (1)
Equity securities$130.9 $4.2 $126.7 $— M
Redeemable noncontrolling interests56.5 — — 56.5 I
As of December 31, 2023     
Equity securities$126.2 $4.0 $122.2 $— M
Redeemable noncontrolling interests42.0 — — 42.0 I
(1)The two valuation techniques are: market approach (M) and income approach (I).
Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments The carrying amounts and estimated fair values for our other financial instruments are presented in the following table (in millions):
 As of December 31, 2024As of December 31, 2023
 Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Long-term debt:    
Advances under revolving credit facility$20.0 $20.0 $— $— 
5.75% Senior Notes due 2025
99.8 99.7 348.5 349.3 
4.50% Senior Notes due 2028
788.4 772.3 785.0 763.6 
4.75% Senior Notes due 2030
784.2 759.0 781.5 755.0 
4.625% Senior Notes due 2031
392.5 369.9 391.5 369.4 
Other notes payable94.5 94.5 66.0 66.0 
Financial commitments:    
Letters of credit— 36.3 — 31.9 
v3.25.0.1
Share-Based Payments (Tables)
 12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Schedule of Weighted-Average Assumptions Used to Determine Fair Value of Stock Options
The fair values of the options granted during the years ended December 31, 2024, 2023, and 2022 have been estimated at the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 For the Year Ended December 31,
 202420232022
Expected volatility27.9 %28.5 %28.3 %
Risk-free interest rate4.2 %4.2 %1.7 %
Expected life (years)7.26.97.8
Dividend yield1.0 %1.1 %1.9 %
Schedule of Stock Option Activity
A summary of our stock option activity and related information is as follows:
 Shares
(In Thousands)		Weighted- Average Exercise Price per ShareWeighted- Average Remaining Life (Years)Aggregate Intrinsic Value
(In Millions)
Outstanding, December 31, 2023853 $49.52   
Granted64 74.20   
Exercised(77)31.66   
Outstanding, December 31, 2024840 53.05 5.1$33.0 
Exercisable, December 31, 2024686 50.72 4.328.6 
Schedule of Restricted Stock Activity
A summary of our issued restricted stock awards is as follows (share information in thousands):
 SharesWeighted-Average Grant Date Fair Value
Nonvested shares at December 31, 2023706 $63.60 
Granted620 61.67 
Vested(481)65.39 
Forfeited(41)61.52 
Nonvested shares at December 31, 2024804 61.14 
v3.25.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
The significant components of the Provision for income tax expense related to continuing operations are as follows (in millions):
 For the Year Ended December 31,
 202420232022
Current:   
Federal$111.0 $101.7 $58.7 
State and other28.5 26.6 13.5 
Total current expense139.5 128.3 72.2 
Deferred:   
Federal8.6 (0.7)17.9 
State and other2.1 4.6 10.0 
Total deferred expense10.7 3.9 27.9 
Total income tax expense related to continuing operations$150.2 $132.2 $100.1 
Schedule of Effective Income Tax Rate Reconciliation
A reconciliation of differences between the federal income tax at statutory rates and our actual income tax expense on our income from continuing operations, which include federal, state, and other income taxes, is presented below:
 For the Year Ended December 31,
 202420232022
Tax expense at statutory rate21.0 %21.0 %21.0 %
Increase (decrease) in tax rate resulting from:   
State and other income taxes, net of federal tax benefit3.9 %4.1 %4.0 %
Increase in valuation allowance— %0.3 %0.6 %
Noncontrolling interests(3.8)%(4.0)%(4.4)%
Share-based windfall tax benefits(1.0)%— %— %
Other, net(0.1)%0.4 %1.0 %
Income tax expense20.0 %21.8 %22.2 %
Schedule of Components of Deferred Tax Assets and Liabilities The significant components of our deferred tax assets and liabilities are presented in the following table (in millions):
 As of December 31,
 20242023
Deferred income tax assets:  
Net operating loss$8.8 $23.1 
Insurance reserve20.9 20.1 
Stock-based compensation24.0 21.4 
Revenue reserves8.0 7.6 
Operating lease liabilities7.9 8.8 
Other accruals29.4 26.2 
Tax credits17.0 14.6 
Total deferred income tax assets116.0 121.8 
Less: Valuation allowance(21.0)(28.4)
Net deferred income tax assets95.0 93.4 
Deferred income tax liabilities:  
Intangibles(63.4)(62.6)
Operating lease right-of-use assets(6.8)(7.8)
Property, net(18.8)(18.1)
Carrying value of partnerships(110.9)(91.7)
Other(0.3)(0.2)
Total deferred income tax liabilities(200.2)(180.4)
Net deferred income tax liabilities$(105.2)$(87.0)
v3.25.0.1
Earnings Per Common Share (Tables)
 12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Schedule of Computation of Basic and Diluted Earnings per Common Share
The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts):
 For the Year Ended December 31,
 202420232022
Basic:
Numerator:   
Income from continuing operations$599.4 $475.0 $350.7 
Less: Net income attributable to noncontrolling interests included in continuing operations(140.9)(111.0)(93.6)
Less: Income from continuing operations allocated to participating securities(2.8)(2.4)(1.1)
Income from continuing operations attributable to Encompass Health common shareholders455.7 361.6 256.0 
(Loss) income from discontinued operations, net of tax(2.8)(12.0)15.2 
Less: Net income attributable to noncontrolling interests included in discontinued operations— — (1.3)
Less: Income from discontinued operations allocated to participating securities— — (0.1)
(Loss) income from discontinued operations attributable to Encompass Health common shareholders(2.8)(12.0)13.8 
Net income attributable to Encompass Health common shareholders$452.9 $349.6 $269.8 
Denominator:   
Basic weighted average common shares outstanding99.9 99.5 99.2 
Basic earnings per share attributable to Encompass Health common shareholders:
   
Continuing operations
$4.56 $3.63 $2.58 
Discontinued operations
(0.03)(0.12)0.14 
Net income$4.53 $3.51 $2.72 
Diluted:
Numerator:
Income from continuing operations$599.4 $475.0 $350.7 
Less: Net income attributable to noncontrolling interests included in continuing operations(140.9)(111.0)(93.6)
Income from continuing operations attributable to Encompass Health common shareholders458.5 364.0 257.1 
(Loss) income from discontinued operations, net of tax(2.8)(12.0)15.2 
Less: Net income attributable to noncontrolling interests included in discontinued operations— — (1.3)
(Loss) income from discontinued operations attributable to Encompass Health common shareholders(2.8)(12.0)13.9 
Net income attributable to Encompass Health common shareholders$455.7 $352.0 $271.0 
Denominator:   
Diluted weighted average common shares outstanding
102.2 101.3 100.4 
Diluted earnings per share attributable to Encompass Health common shareholders:
   
Continuing operations
$4.49 $3.59 $2.56 
Discontinued operations
(0.03)(0.12)0.14 
Net income
$4.46 $3.47 $2.70 
Schedule of Reconciliation of Weighted Average Number of Shares Outstanding
The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions):
For the Year Ended December 31,
202420232022
Basic weighted average common shares outstanding99.9 99.5 99.2 
Restricted stock awards, dilutive stock options, and restricted stock units
2.3 1.8 1.2 
Diluted weighted average common shares outstanding102.2 101.3 100.4 
v3.25.0.1
Segment Reporting (Tables)
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Schedule of Selected Financial Information of Reportable Segments
Selected financial information, including significant segment expenses, for our reportable segment is as follows (in millions):
For the Year Ended December 31,
202420232022
Net operating revenues$5,373.2 $4,801.2 $4,348.6 
Less:
Salaries and benefits2,901.0 2,600.1 2,393.3 
Other operating expenses785.2 709.3 665.6 
Supplies239.0 218.3 202.1 
Occupancy costs57.3 56.3 54.7 
General and administrative expenses156.1 146.5 130.4 
Net income attributable to noncontrolling interests148.2 113.2 93.6 
Other segment items(1)
(17.3)(13.6)(10.4)
Adjusted EBITDA$1,103.7 $971.1 $819.3 
(1)Includes interest income, investment gain or loss, and equity in net income of nonconsolidated affiliates.
Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense
Segment reconciliation (in millions):
For the Year Ended December 31,
202420232022
Adjusted EBITDA$1,103.7 $971.1 $819.3 
Stock-based compensation(48.3)(50.6)(29.2)
Depreciation and amortization(299.6)(273.9)(243.6)
Loss on disposal or impairment of assets(17.4)(9.8)(4.8)
Loss on early extinguishment of debt(0.6)— (1.4)
Interest expense and amortization of debt discounts and fees(137.4)(143.5)(175.7)
Net income attributable to noncontrolling interests140.9 111.0 93.6 
Change in fair market value of equity securities1.0 0.7 (7.4)
Asset impairment impact on noncontrolling interests7.3 — — 
State regulatory change impact on noncontrolling interests— 2.2 — 
Income from continuing operations before income tax expense$749.6 $607.2 $450.8 
Reconciliation of Revenue from Segments to Consolidated
Additional detail regarding the revenues of our operating segment by service line follows (in millions):
For the Year Ended December 31,
202420232022
Net operating revenues:
Inpatient$5,230.5 $4,693.8 $4,251.6 
Outpatient and other142.7 107.4 97.0 
Net operating revenues$5,373.2 $4,801.2 $4,348.6 
v3.25.0.1
Summary of Significant Accounting Policies - Additional Information (Details)
$ in Millions
 3 Months Ended 12 Months Ended
Jul. 01, 2024
USD ($)
bed
Mar. 31, 2023
USD ($)
Dec. 31, 2024
USD ($)
hospital
state
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Finite-Lived Intangible Assets [Line Items]          
Number of states in which entity operates | state     38    
Number of inpatient rehabilitation hospitals | hospital     166    
Number of inpatient rehabilitation hospitals, sole ownership | hospital     101    
Number of jointly owned inpatient rehabilitation hospitals | hospital     65    
Contributions from noncontrolling interests of consolidated affiliates     $ 140.4 $ 68.3 $ 64.1
Minimum accrual of loss contingency needed to accrue for related legal fees     5.0    
Advertising expense     5.8 6.1 $ 6.3
Hospital in Augusta, Georgia | Corporate Joint Venture          
Finite-Lived Intangible Assets [Line Items]          
Number of beds | bed 70        
Contributions from noncontrolling interests of consolidated affiliates $ 90.0        
Remaining noncontrolling interest 50.00%        
Post-tax gain increasing capital in excess of par     $ 23.2    
Market access assets          
Finite-Lived Intangible Assets [Line Items]          
Finite-lived intangible asset useful life     20 years    
ALJ, Adverse Ruling          
Finite-Lived Intangible Assets [Line Items]          
Amount of claims pending review     $ 4.0    
DAB, Adverse Ruling          
Finite-Lived Intangible Assets [Line Items]          
Amount of claims pending review     30.0    
Appealed claims denied     7.0    
Pending appeals additional reserve       $ 21.9  
UPICs Audits          
Finite-Lived Intangible Assets [Line Items]          
Alleged overpayment amount     $ 18.0    
SMRC          
Finite-Lived Intangible Assets [Line Items]          
Review of claims initiated amount   $ 21.0      
Approved claims (in percent)     0.89    
Claims under appeal amount     $ 0.1    
Payor Source | Revenue from Contract with Customer Benchmark | Medicare | RAC Audits          
Finite-Lived Intangible Assets [Line Items]          
Percentage of Medicare patient discharges (percent)     1.00%    
Minimum          
Finite-Lived Intangible Assets [Line Items]          
Joint venture ownership percentage     50.00%    
Maximum          
Finite-Lived Intangible Assets [Line Items]          
Joint venture ownership percentage     97.50%    
v3.25.0.1
Summary of Significant Accounting Policies - Net Operating Revenues (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Disaggregation of Revenue [Line Items]      
Net operating revenues $ 5,373.2 $ 4,801.2 $ 4,348.6
Medicare      
Disaggregation of Revenue [Line Items]      
Net operating revenues 3,495.3 3,126.1 2,843.1
Medicare Advantage      
Disaggregation of Revenue [Line Items]      
Net operating revenues 903.7 776.1 654.6
Managed care      
Disaggregation of Revenue [Line Items]      
Net operating revenues 579.2 531.4 505.2
Medicaid      
Disaggregation of Revenue [Line Items]      
Net operating revenues 179.4 190.7 183.3
Other third-party payors      
Disaggregation of Revenue [Line Items]      
Net operating revenues 41.7 41.8 39.5
Workers’ compensation      
Disaggregation of Revenue [Line Items]      
Net operating revenues 27.8 25.8 24.7
Patients      
Disaggregation of Revenue [Line Items]      
Net operating revenues 15.9 14.9 16.6
Other income      
Disaggregation of Revenue [Line Items]      
Net operating revenues $ 130.2 $ 94.4 $ 81.6
v3.25.0.1
Summary of Significant Accounting Policies - Accounts Receivable (Details) - Payor Source - Accounts Receivable
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Concentration Risk [Line Items]    
Net operating revenues by payor source (percent) 100.00% 100.00%
Medicare | Third-Party Payor    
Concentration Risk [Line Items]    
Net operating revenues by payor source (percent) 55.50% 57.60%
Managed care and other discount plans, including Medicare Advantage | Third-Party Payor    
Concentration Risk [Line Items]    
Net operating revenues by payor source (percent) 34.30% 32.30%
Medicaid | Third-Party Payor    
Concentration Risk [Line Items]    
Net operating revenues by payor source (percent) 4.00% 4.00%
Other third-party payors | Third-Party Payor    
Concentration Risk [Line Items]    
Net operating revenues by payor source (percent) 2.80% 2.70%
Workers’ compensation | Third-Party Payor    
Concentration Risk [Line Items]    
Net operating revenues by payor source (percent) 2.60% 2.50%
Patients | Self-Pay    
Concentration Risk [Line Items]    
Net operating revenues by payor source (percent) 0.80% 0.90%
v3.25.0.1
Summary of Significant Accounting Policies - PP&E Useful Lives (Details)
Dec. 31, 2024
Buildings | Minimum  
Property, Plant and Equipment [Line Items]  
Useful life 10 years
Buildings | Maximum  
Property, Plant and Equipment [Line Items]  
Useful life 30 years
Leasehold improvements | Minimum  
Property, Plant and Equipment [Line Items]  
Useful life 2 years
Leasehold improvements | Maximum  
Property, Plant and Equipment [Line Items]  
Useful life 15 years
Vehicles  
Property, Plant and Equipment [Line Items]  
Useful life 5 years
Furniture, fixtures, and equipment | Minimum  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Furniture, fixtures, and equipment | Maximum  
Property, Plant and Equipment [Line Items]  
Useful life 10 years
v3.25.0.1
Summary of Significant Accounting Policies - Intangible Asset Useful Lives (Details)
Dec. 31, 2024
Certificates of need | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 10 years
Certificates of need | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 30 years
Licenses | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 10 years
Licenses | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 20 years
Noncompete agreements | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 1 year
Noncompete agreements | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 18 years
Trade Names | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 10 years
Trade Names | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 20 years
Internal-use software | Minimum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 3 years
Internal-use software | Maximum  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 7 years
Market access assets  
Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset useful life 20 years
v3.25.0.1
Spin Off of Home Health and Hospice Business - Additional Information (Details)
$ / shares in Units, $ in Millions
 12 Months Ended
Jul. 01, 2022
$ / shares
Dec. 31, 2024
USD ($)
$ / shares
Dec. 31, 2023
USD ($)
$ / shares
Dec. 31, 2022
USD ($)
Jun. 30, 2022
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Common stock, par value (in dollars per share) | $ / shares   $ 0.01 $ 0.01    
Enhabit          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Common stock, par value (in dollars per share) | $ / shares $ 0.01        
Enhabit | Common Stock          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Pro rata distribution of common stock 0.5        
Enhabit | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Transaction costs       $ 56.7  
Legal costs   $ 2.9 $ 15.8    
Enhabit | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | Trade Names          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Transferred to discontinued operations         $ 104.2
v3.25.0.1
Spin Off of Home Health and Hospice Business- Summary of Financial Information Related to Discontinued Operations (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Operating expenses:      
Income from discontinued operations, net of tax $ (2.8) $ (12.0) $ 15.2
Less: Net income attributable to noncontrolling interests included in discontinued operations 0.0 0.0 (1.3)
Net income attributable to Encompass Health included in discontinued operations $ (2.8) $ (12.0) 13.9
Enhabit | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff      
Income from discontinued operations      
Net operating revenue     542.3
Operating expenses:      
Salaries and benefits     376.4
Other operating expenses     47.5
Occupancy costs     11.0
Supplies     11.7
General and administrative expenses     59.3
Depreciation and amortization     16.7
Total operating expenses     522.6
Interest expense and amortization of debt discounts and fees     0.2
Income from discontinued operations before income taxes     19.5
Provision for income tax expense     4.3
Income from discontinued operations, net of tax     15.2
Less: Net income attributable to noncontrolling interests included in discontinued operations     (1.3)
Net income attributable to Encompass Health included in discontinued operations     $ 13.9
v3.25.0.1
Variable Interest Entities - Additional Information (Details) - Variable Interest Entity, Primary Beneficiary - entity
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Variable Interest Entity [Line Items]    
Number of consolidated limited partnership-like entities 8 8
Minimum    
Variable Interest Entity [Line Items]    
Ownership interest in the consolidated entities (percent) 50.00%  
Maximum    
Variable Interest Entity [Line Items]    
Ownership interest in the consolidated entities (percent) 75.00%  
v3.25.0.1
Variable Interest Entities - Carrying Amounts and Classification of Consolidated VIEs (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Current assets:        
Cash and cash equivalents $ 85.4 $ 69.1 $ 21.8 $ 49.4
Accounts receivable 598.8 611.6    
Other current assets 122.7 91.5    
Total current assets 886.9 841.8    
Property and equipment, net 3,643.1 3,301.0    
Operating lease right-of-use assets 203.7 208.5    
Goodwill 1,284.0 1,281.3 $ 1,263.2 $ 1,237.0
Intangible assets, net 297.8 278.2    
Other long-term assets 219.2 191.6    
Total assets [1] 6,534.7 6,102.4    
Current liabilities:        
Current portion of long-term debt 138.6 24.8    
Accounts payable 171.0 170.0    
Accrued payroll 227.9 207.5    
Other current liabilities 238.6 187.4    
Total current liabilities 841.0 656.4    
Long-term debt, net of current portion 2,359.2 2,687.8    
Long-term operating lease liabilities 189.7 196.1    
Total liabilities [1] 3,685.5 3,805.2    
Variable Interest Entity, Primary Beneficiary        
Current assets:        
Cash and cash equivalents 0.4 0.2    
Accounts receivable 34.5 36.7    
Other current assets 9.6 5.0    
Total current assets 44.5 41.9    
Property and equipment, net 135.7 128.8    
Operating lease right-of-use assets 1.3 1.4    
Goodwill 15.9 15.9    
Intangible assets, net 1.0 1.2    
Other long-term assets 9.7 18.5    
Total assets 208.1 207.7    
Current liabilities:        
Current portion of long-term debt 1.0 0.9    
Accounts payable 6.2 7.6    
Accrued payroll 11.0 9.4    
Other current liabilities 12.7 9.3    
Total current liabilities 30.9 27.2    
Long-term debt, net of current portion 12.7 13.6    
Long-term operating lease liabilities 1.4 1.4    
Total liabilities $ 45.0 $ 42.2    
[1] Our consolidated assets as of December 31, 2024 and December 31, 2023 include total assets of variable interest entities of $208.1 million and $207.7 million, respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of December 31, 2024 and December 31, 2023 include total liabilities of the variable interest entities of $45.0 million and $42.2 million, respectively. See Note 3, Variable Interest Entities.
v3.25.0.1
Cash and Marketable Securities - Components of Investments (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Cash and Cash Equivalents [Line Items]        
Cash & Cash Equivalents $ 85.4 $ 69.1 $ 21.8 $ 49.4
Restricted Cash 37.7 35.1    
Restricted Marketable Securities 130.9 126.2    
Total 254.0 230.4    
Cash        
Cash and Cash Equivalents [Line Items]        
Cash & Cash Equivalents 85.4 69.1    
Restricted Cash 37.7 35.1    
Restricted Marketable Securities 0.0 0.0    
Total 123.1 104.2    
Equity securities        
Cash and Cash Equivalents [Line Items]        
Cash & Cash Equivalents 0.0 0.0    
Restricted Cash 0.0 0.0    
Restricted Marketable Securities 130.9 126.2    
Total $ 130.9 $ 126.2    
v3.25.0.1
Cash and Marketable Securities - Restricted Cash (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Restricted Cash and Cash Equivalents Items [Line Items]    
Restricted cash $ 37.7 $ 35.1
Affiliate cash    
Restricted Cash and Cash Equivalents Items [Line Items]    
Restricted cash 17.9 17.7
Self-insured captive funds    
Restricted Cash and Cash Equivalents Items [Line Items]    
Restricted cash 19.8 17.1
Other    
Restricted Cash and Cash Equivalents Items [Line Items]    
Restricted cash $ 0.0 $ 0.3
v3.25.0.1
Cash and Marketable Securities - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Cash and Cash Equivalents [Line Items]      
Unrealized net gain (loss) on marketable securities $ 1.0 $ 1.3 $ (7.4)
Fair Value, Recurring      
Cash and Cash Equivalents [Line Items]      
Equity securities 130.9 126.2  
Other Current Assets | Fair Value, Recurring      
Cash and Cash Equivalents [Line Items]      
Equity securities 39.0 37.6  
Other Noncurrent Assets | Fair Value, Recurring      
Cash and Cash Equivalents [Line Items]      
Equity securities $ 91.9 $ 88.6  
v3.25.0.1
Accounts Receivable - Components of Accounts Receivable (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Current:    
Patient accounts receivable $ 593.0 $ 599.8
Other accounts receivable 5.8 11.8
Accounts receivable, current 598.8 611.6
Noncurrent patient accounts receivable 30.6 20.9
Accounts receivable $ 629.4 $ 632.5
v3.25.0.1
Property and Equipment - Components of Property and Equipment (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Components of Property and Equipment    
Property and equipment, net $ 3,643.1 $ 3,301.0
Land, Building, Improvements, Equipment, Vehicles and Furniture    
Components of Property and Equipment    
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization 5,349.1 4,742.2
Less: Accumulated depreciation and amortization (2,111.9) (1,872.2)
Property and equipment, net 3,237.2 2,870.0
Land    
Components of Property and Equipment    
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization 302.6 294.0
Buildings    
Components of Property and Equipment    
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization 3,859.3 3,402.8
Leasehold improvements    
Components of Property and Equipment    
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization 372.8 316.8
Vehicles    
Components of Property and Equipment    
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization 5.6 5.3
Furniture, fixtures, and equipment    
Components of Property and Equipment    
Property, plant, and equipment and finance lease right-of-use asset, before accumulated depreciation and amortization 808.8 723.3
Construction in progress    
Components of Property and Equipment    
Property and equipment, net $ 405.9 $ 431.0
v3.25.0.1
Property and Equipment - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Abstract]      
Percentage of property and equipment, net pledged to lenders under credit agreement (percent) 66.00%    
Depreciation $ 245.1 $ 215.7 $ 187.3
Interest capitalized $ 15.2 $ 13.5 $ 10.5
v3.25.0.1
Leases - Additional Information (Details)
 12 Months Ended
Dec. 31, 2024
option
Lessee, Lease, Description [Line Items]  
Number of renewal options (or more) 1
Minimum  
Lessee, Lease, Description [Line Items]  
Operating and finance lease contract term 1 year
Maximum  
Lessee, Lease, Description [Line Items]  
Operating and finance lease contract term 25 years
v3.25.0.1
Leases - Components of Lease Costs (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]      
Operating lease cost $ 41.7 $ 40.9 $ 38.7
Finance lease cost:      
Amortization of right-of-use assets 25.7 25.7 27.5
Interest on lease liabilities 24.7 26.2 29.0
Total finance lease cost 50.4 51.9 56.5
Short-term and variable lease cost 2.3 2.9 5.2
Sublease income (3.1) (3.3) (2.9)
Total lease cost $ 91.3 $ 92.4 $ 97.5
v3.25.0.1
Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Assets    
Operating lease $ 203.7 $ 208.5
Finance lease 221.5 247.2
Total leased assets 425.2 455.7
Current liabilities:    
Operating lease 26.3 24.1
Finance lease 23.7 21.6
Noncurrent liabilities:    
Operating lease 189.7 196.1
Finance lease 294.7 318.5
Total lease liabilities $ 534.4 $ 560.3
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] Property and equipment, net Property and equipment, net
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Current portion of long-term debt Current portion of long-term debt
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Long-term debt, net of current portion Long-term debt, net of current portion
Finance lease right-of-use asset accumulated amortization $ 197.3 $ 171.6
v3.25.0.1
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Details)
Dec. 31, 2024
Dec. 31, 2023
Weighted Average Remaining Lease Term    
Operating lease (in years) 9 years 8 months 12 days 9 years 6 months
Finance lease (in years) 9 years 9 months 18 days 10 years 8 months 12 days
Weighted Average Discount Rate    
Operating lease (in percent) 6.40% 6.30%
Finance lease (in percent) 7.70% 7.70%
v3.25.0.1
Leases - Maturities of Lease Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Operating Leases    
2025 $ 38.9  
2026 39.6  
2027 37.7  
2028 36.7  
2029 22.4  
2030 and thereafter 121.5  
Total lease payments 296.8  
Less: Interest portion (80.8)  
Total lease liabilities 216.0  
Finance Leases    
2025 46.7  
2026 47.9  
2027 47.4  
2028 46.4  
2029 47.3  
2030 and thereafter 222.9  
Total lease payments 458.6  
Less: Interest portion (140.2)  
Total lease liabilities $ 318.4 $ 340.1
v3.25.0.1
Leases - Supplemental Cash Flow Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:      
Operating cash flows from operating leases $ 40.7 $ 39.0 $ 40.5
Operating cash flows from finance leases 25.5 27.1 29.7
Financing cash flows from finance leases 21.8 41.1 19.2
Right-of-use assets obtained in exchange for lease obligations:      
Operating leases 26.7 26.2 48.7
Finance leases $ 0.0 $ 21.4 $ 1.0
v3.25.0.1
Goodwill and Other Intangible Assets - Carrying Amounts of Goodwill (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Goodwill [Roll Forward]      
Goodwill, beginning balance $ 1,281.3 $ 1,263.2 $ 1,237.0
Acquisitions 2.7 18.1 26.2
Goodwill, ending balance $ 1,284.0 $ 1,281.3 $ 1,263.2
v3.25.0.1
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($)
Oct. 01, 2024
Oct. 01, 2023
Oct. 01, 2022
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]        
Goodwill impairment loss $ 0 $ 0 $ 0  
Accumulated goodwill impairment       $ 0
v3.25.0.1
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount $ 666.0 $ 639.6
Accumulated Amortization (368.2) (361.4)
Net 297.8 278.2
Certificates of need    
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount 131.4 120.9
Accumulated Amortization (49.0) (43.1)
Net 82.4 77.8
Licenses    
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount 65.7 65.7
Accumulated Amortization (56.4) (55.4)
Net 9.3 10.3
Noncompete agreements    
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount 66.5 66.7
Accumulated Amortization (63.4) (62.0)
Net 3.1 4.7
Trade name - Encompass    
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount 135.2 135.2
Accumulated Amortization 0.0 0.0
Net 135.2 135.2
Trade Names    
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount 39.6 39.3
Accumulated Amortization (23.6) (22.2)
Net 16.0 17.1
Internal-use Software    
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount 214.4 198.6
Accumulated Amortization (163.3) (166.4)
Net 51.1 32.2
Market access assets    
Schedule of Intangible Assets by Major Class    
Gross Carrying Amount 13.2 13.2
Accumulated Amortization (12.5) (12.3)
Net $ 0.7 $ 0.9
v3.25.0.1
Goodwill and Other Intangible Assets - Amortization Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]      
Amortization expense $ 28.8 $ 32.5 $ 28.8
v3.25.0.1
Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details)
$ in Millions
Dec. 31, 2024
USD ($)
Schedule of Future Estimated Amortization Expense, Other Intangible Assets  
2025 $ 25.4
2026 23.0
2027 16.3
2028 12.2
2029 $ 10.7
v3.25.0.1
Long-term Debt - Long-term Debt Outstanding (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Oct. 31, 2020
Sep. 30, 2015
Schedule of Outstanding Long-term Debt        
Finance lease obligations $ 318.4 $ 340.1    
Total debt and Capital lease obligations 2,497.8 2,712.6    
Less: Current portion (138.6) (24.8)    
Long-term debt, net of current portion $ 2,359.2 $ 2,687.8    
Senior Notes | 5.75% Senior Notes due 2025        
Schedule of Outstanding Long-term Debt        
Debt instrument interest rate (percent) 5.75% 5.75%   5.75%
Total debt $ 99.8 $ 348.5    
Senior Notes | 4.50% Senior Notes due 2028        
Schedule of Outstanding Long-term Debt        
Debt instrument interest rate (percent) 4.50% 4.50%    
Total debt $ 788.4 $ 785.0    
Senior Notes | 4.75% Senior Notes due 2030        
Schedule of Outstanding Long-term Debt        
Debt instrument interest rate (percent) 4.75% 4.75%    
Total debt $ 784.2 $ 781.5    
Senior Notes | 4.625% Senior Notes due 2031        
Schedule of Outstanding Long-term Debt        
Debt instrument interest rate (percent) 4.625% 4.625% 4.625%  
Total debt $ 392.5 $ 391.5    
Other notes payable        
Schedule of Outstanding Long-term Debt        
Total debt 94.5 66.0    
Advances under revolving credit facility        
Schedule of Outstanding Long-term Debt        
Total debt 20.0 0.0    
Advances under revolving credit facility | Line of Credit | The Credit Agreement        
Schedule of Outstanding Long-term Debt        
Total debt $ 20.0 $ 0.0    
v3.25.0.1
Long-term Debt - Scheduled Principal Payments Due on Long-term Debt (Details)
$ in Millions
Dec. 31, 2024
USD ($)
Face Amount  
Long-term Debt by Maturity  
2025 $ 138.8
2026 39.4
2027 66.1
2028 833.0
2029 41.7
Thereafter 1,414.1
Total 2,533.1
Net Amount  
Long-term Debt by Maturity  
2025 138.6
2026 39.4
2027 66.1
2028 821.4
2029 41.7
Thereafter 1,390.6
Total $ 2,497.8
v3.25.0.1
Long-term Debt - Additional Information (Details)
 1 Months Ended 2 Months Ended 12 Months Ended
Jun. 30, 2022
USD ($)
Nov. 30, 2024
USD ($)
Aug. 31, 2024
USD ($)
Jun. 30, 2022
USD ($)
Jan. 31, 2022
USD ($)
May 31, 2020
USD ($)
Jan. 31, 2022
USD ($)
Dec. 31, 2024
USD ($)
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Mar. 31, 2022
USD ($)
Mar. 01, 2022
Dec. 09, 2021
USD ($)
Oct. 31, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2015
USD ($)
Debt Instrument [Line Items]                                
Loss on early extinguishment of debt               $ 600,000 $ 0 $ 1,400,000            
Repayments of long-term lines of credit               $ 60,000,000.0 115,000,000.0 $ 385,000,000.0            
Enhabit                                
Debt Instrument [Line Items]                                
Payments of distributions to affiliates $ 566,600,000                              
Senior Notes                                
Debt Instrument [Line Items]                                
Debt instrument, covenant, leverage ratio                         3.5      
Redemption price, (percent)               101.00%                
Debt instrument, reduction in capacity under restricted payments builder basket                         $ 200,000,000      
Amendment agreement, amount to be paid             $ 40,500,000                  
Repayments of debt       $ 20,500,000 $ 20,000,000                      
Proceeds from debt, net of issuance costs           $ 583,000,000                    
Advances under revolving credit facility                                
Debt Instrument [Line Items]                                
Other notes payable               $ 20,000,000 0              
The Credit Agreement                                
Debt Instrument [Line Items]                                
Amounts outstanding under letter of credit facility               $ 36,300,000 31,900,000              
The Credit Agreement | Term loan facilities                                
Debt Instrument [Line Items]                                
Spread on variable rate (percent)               0.50%                
Debt instrument, covenant, leverage ratio               2                
Available limit amount               $ 200,000,000                
The Credit Agreement | Term loan facilities | Minimum                                
Debt Instrument [Line Items]                                
Commitment fee (percent)               0.25%                
The Credit Agreement | Term loan facilities | Maximum                                
Debt Instrument [Line Items]                                
Commitment fee (percent)               0.30%                
Debt instrument, covenant, leverage ratio               4.50                
The Credit Agreement | Variable Rate Component One | Term loan facilities                                
Debt Instrument [Line Items]                                
Spread on variable rate (percent)               1.25%                
The Credit Agreement | Advances under revolving credit facility                                
Debt Instrument [Line Items]                                
Credit facility borrowing capacity               $ 1,000,000,000                
Applicable interest rate under credit facility (percent)               7.80%                
The Credit Agreement | Advances under revolving credit facility | Line of Credit                                
Debt Instrument [Line Items]                                
Repayments of long-term lines of credit 250,000,000                              
Other notes payable               $ 20,000,000.0 0              
The Credit Agreement | Letter of Credit                                
Debt Instrument [Line Items]                                
Credit facility borrowing capacity               260,000,000                
The Credit Agreement | Term loan facilities                                
Debt Instrument [Line Items]                                
Credit facility borrowing capacity               270,000,000                
The Credit Agreement | Term loan facilities | Line of Credit                                
Debt Instrument [Line Items]                                
Repayments of secured debt $ 236,000,000                              
5.75% Senior Notes due 2025 | Senior Notes                                
Debt Instrument [Line Items]                                
Other notes payable               $ 99,800,000 $ 348,500,000              
Debt instrument interest rate (percent)               5.75% 5.75%             5.75%
Aggregate principal amount                               $ 350,000,000
Effective interest rate (percent)               6.00%                
Debt redeemed   $ 100,000,000 $ 150,000,000                          
4.50% Senior Notes due 2028 | Senior Notes                                
Debt Instrument [Line Items]                                
Other notes payable               $ 788,400,000 $ 785,000,000.0              
Debt instrument interest rate (percent)               4.50% 4.50%              
Aggregate principal amount           $ 300,000,000                 $ 500,000,000  
Effective interest rate (percent)               5.00%                
Issuance of face value (percent)           99.00%                    
4.75% Senior Notes due 2030 | Senior Notes                                
Debt Instrument [Line Items]                                
Other notes payable               $ 784,200,000 $ 781,500,000              
Debt instrument interest rate (percent)               4.75% 4.75%              
Aggregate principal amount           $ 300,000,000                 $ 500,000,000  
Effective interest rate (percent)               5.20%                
Issuance of face value (percent)           98.50%                    
4.625% Senior Notes due 2031 | Senior Notes                                
Debt Instrument [Line Items]                                
Other notes payable               $ 392,500,000 $ 391,500,000              
Debt instrument interest rate (percent)               4.625% 4.625%         4.625%    
Aggregate principal amount                           $ 400,000,000    
Effective interest rate (percent)               5.00%                
Senior Notes, 05.125%, Due 2023 | Senior Notes                                
Debt Instrument [Line Items]                                
Debt instrument interest rate (percent)                     5.125%          
Aggregate principal amount                     $ 100,000,000          
Effective interest rate (percent)                       5.40%        
v3.25.0.1
Long-term Debt - Senior Notes Redemption Prices (Details) - Senior Notes
 1 Months Ended 9 Months Ended 12 Months Ended
Oct. 31, 2020
May 31, 2020
Dec. 31, 2024
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent)     101.00%
4.50% Senior Notes due 2028 | Debt Instrument, Redemption, Period One      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent)   101.125%  
4.50% Senior Notes due 2028 | Debt Instrument, Redemption, Period Two      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent)   100.00%  
4.75% Senior Notes due 2030 | Debt Instrument, Redemption, Period One      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent)   102.375%  
4.75% Senior Notes due 2030 | Debt Instrument, Redemption, Period Two      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent)   101.583%  
4.75% Senior Notes due 2030 | Debt Instrument, Redemption, Period Three      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent)   100.792%  
4.75% Senior Notes due 2030 | Debt Instrument, Redemption, Period Four      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent)   100.00%  
4.625% Senior Notes due 2031 | Debt Instrument, Redemption, Period One      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent) 102.313%    
4.625% Senior Notes due 2031 | Debt Instrument, Redemption, Period Two      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent) 101.542%    
4.625% Senior Notes due 2031 | Debt Instrument, Redemption, Period Three      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent) 100.771%    
4.625% Senior Notes due 2031 | Debt Instrument, Redemption, Period Four      
Debt Instrument, Redemption [Line Items]      
Redemption price, (percent) 100.00%    
v3.25.0.1
Long-term Debt - Schedule of Notes Payable (Details) - Other notes payable - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Other notes payable $ 94.5 $ 66.0
Sale/leaseback transactions involving real estate accounted for as financings    
Debt Instrument [Line Items]    
Other notes payable $ 28.0 28.0
Sale/leaseback transactions involving real estate accounted for as financings | Minimum    
Debt Instrument [Line Items]    
Effective interest rate (percent) 9.20%  
Sale/leaseback transactions involving real estate accounted for as financings | Maximum    
Debt Instrument [Line Items]    
Effective interest rate (percent) 13.40%  
Construction of new hospitals    
Debt Instrument [Line Items]    
Other notes payable $ 47.6 38.0
Construction of new hospitals | Minimum    
Debt Instrument [Line Items]    
Effective interest rate (percent) 5.00%  
Construction of new hospitals | Maximum    
Debt Instrument [Line Items]    
Effective interest rate (percent) 6.30%  
Software contracts    
Debt Instrument [Line Items]    
Other notes payable $ 18.9 $ 0.0
Software contracts | Minimum    
Debt Instrument [Line Items]    
Effective interest rate (percent) 5.50%  
Software contracts | Maximum    
Debt Instrument [Line Items]    
Effective interest rate (percent) 6.50%  
v3.25.0.1
Self-Insured Risks - Additional Information (Details)
$ in Millions
Dec. 31, 2024
USD ($)
claim
Dec. 31, 2023
USD ($)
claim
Insurance [Abstract]    
Self-insured amount $ 45.0  
Self-insurance reserves included in Other current liabilities $ 56.2 $ 52.7
Number of individual claims covered by reserves | claim 1,100 1,100
v3.25.0.1
Self-Insured Risks - Changes in Self-insurance Reserves (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]      
Balance at beginning of period, gross $ 184.5 $ 175.1 $ 169.4
Less: Reinsurance receivables (36.4) (32.3) (30.0)
Balance at beginning of period, net 148.1 142.8 139.4
Increase for the provision of current year claims 59.1 54.7 50.5
Decrease for the provision of prior year claims (10.9) (10.5) (8.2)
Payments related to current year claims (6.9) (8.1) (7.1)
Payments related to prior year claims (32.2) (30.8) (31.8)
Balance at end of period, net 157.2 148.1 142.8
Add: Reinsurance receivables 37.6 36.4 32.3
Balance at end of period, gross $ 194.8 $ 184.5 $ 175.1
v3.25.0.1
Redeemable Noncontrolling Interests - Redeemable Noncontrolling Interests Activity (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward]      
Balance at beginning of period $ 42.0    
Net income attributable to noncontrolling interests 5.1 $ 8.3 $ 7.2
Distributions declared (121.3) (110.0) (99.5)
Balance at end of period 56.5 42.0  
Redeemable Noncontrolling Interest      
Redeemable Noncontrolling Interest, Equity, Carrying Amount [Roll Forward]      
Balance at beginning of period 42.0 35.6 42.2
Net income attributable to noncontrolling interests 5.1 8.3 7.2
Distributions declared (10.2) (1.1) (5.3)
Contribution to joint ventures 18.0 0.0 0.0
Change in fair value 1.6 (0.8) (3.4)
Other 0.0 0.0 0.1
Spin off of Enhabit, Inc. 0.0 0.0 (5.2)
Balance at end of period $ 56.5 $ 42.0 $ 35.6
v3.25.0.1
Redeemable Noncontrolling Interests - Reconciliation of Noncontrolling Interests (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Noncontrolling Interest [Abstract]      
Net income attributable to nonredeemable noncontrolling interests $ 135.8 $ 102.7 $ 87.7
Net income attributable to redeemable noncontrolling interests 5.1 8.3 7.2
Net income attributable to noncontrolling interests $ 140.9 $ 111.0 $ 94.9
v3.25.0.1
Fair Value Measurements - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities $ 130.9 $ 126.2
Redeemable noncontrolling interests 56.5 42.0
Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 4.2 4.0
Redeemable noncontrolling interests 0.0 0.0
Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 126.7 122.2
Redeemable noncontrolling interests 0.0 0.0
Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 0.0 0.0
Redeemable noncontrolling interests $ 56.5 $ 42.0
v3.25.0.1
Fair Value Measurements - Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Oct. 31, 2020
Sep. 30, 2015
Carrying Amount | Other notes payable        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 94.5 $ 66.0    
Estimated Fair Value | Other notes payable        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 94.5 $ 66.0    
5.75% Senior Notes due 2025 | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Debt instrument interest rate (percent) 5.75% 5.75%   5.75%
5.75% Senior Notes due 2025 | Carrying Amount | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 99.8 $ 348.5    
5.75% Senior Notes due 2025 | Estimated Fair Value | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 99.7 $ 349.3    
4.50% Senior Notes due 2028 | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Debt instrument interest rate (percent) 4.50% 4.50%    
4.50% Senior Notes due 2028 | Carrying Amount | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 788.4 $ 785.0    
4.50% Senior Notes due 2028 | Estimated Fair Value | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 772.3 $ 763.6    
4.75% Senior Notes due 2030 | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Debt instrument interest rate (percent) 4.75% 4.75%    
4.75% Senior Notes due 2030 | Carrying Amount | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 784.2 $ 781.5    
4.75% Senior Notes due 2030 | Estimated Fair Value | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 759.0 $ 755.0    
4.625% Senior Notes due 2031 | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Debt instrument interest rate (percent) 4.625% 4.625% 4.625%  
4.625% Senior Notes due 2031 | Carrying Amount | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 392.5 $ 391.5    
4.625% Senior Notes due 2031 | Estimated Fair Value | Senior Notes        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments 369.9 369.4    
Advances under revolving credit facility | Carrying Amount        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments 20.0 0.0    
Advances under revolving credit facility | Estimated Fair Value        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments 20.0 0.0    
Letter of Credit | Carrying Amount        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments 0.0 0.0    
Letter of Credit | Estimated Fair Value        
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]        
Carrying amounts and estimated fair values of financial instruments $ 36.3 $ 31.9    
v3.25.0.1
Share-Based Payments - Additional Information (Details) - USD ($)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 48,300,000 $ 50,600,000 $ 29,200,000
Weighted-average fair value per share (in dollars per share) $ 26.14 $ 19.23 $ 17.29
Unrecognized compensation cost $ 300,000    
Intrinsic value of stock options exercised 4,000,000.0 $ 2,500,000 $ 1,800,000
Stock Options      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 1,900,000 2,500,000 1,200,000
Expiration period 10 years    
Vesting period 3 years    
Weighted-average recognition period for unrecognized compensation cost 19 months    
Restricted Stock      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 44,900,000 $ 46,600,000 $ 26,400,000
Weighted-average recognition period for unrecognized compensation cost 21 months    
Award requisite service period 3 years    
Weighted-average fair value per share of awards granted (in dollars per share) $ 61.67 $ 65.20 $ 74.08
Unrecognized compensation cost related to unvested restricted stock $ 36,200,000    
Fair value of vested shares $ 33,700,000 $ 24,300,000 $ 20,000,000.0
Awards issued during period (in shares) 620,000    
Restricted Stock Units (RSUs) | Non-employee Board Of Directors      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Weighted-average fair value per share of awards granted (in dollars per share) $ 83.42 $ 63.00 $ 67.42
Awards issued during period (in shares) 23,509 32,365 22,469
Compensation expense $ 1,500,000 $ 1,500,000 $ 1,500,000
Unrecognized compensation cost $ 0    
Restricted Stock Units (RSUs) | Former non-employee Directors      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Awards issued during period (in shares) 516,198    
Restricted Stock Units (RSUs) | Current And Former Board Of Directors      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Awards issued during period (in shares)     130,406
Dividend Equivalent, RSU | Non-employee Board Of Directors      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Awards issued during period (in shares) 5,707 7,518 11,976
Dividend Equivalent, RSU | Former non-employee Directors      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Awards issued during period (in shares) 314,998    
Fair value of shares issued $ 29,100,000    
2016 Omnibus Performance Incentive Plan      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares authorized for grant under the plan (in shares) 16,860,765    
Continuing Operations      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 48,300,000 $ 50,600,000 $ 29,200,000
Discontinued Operations      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense     $ 2,500,000
v3.25.0.1
Share-Based Payments - Weighted-average Assumptions (Details) - Stock Options
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Schedule of Weighted Average Assumptions Used to Determine Fair Value of Stock Options      
Expected volatility (percent) 27.90% 28.50% 28.30%
Risk-free interest rate (percent) 4.20% 4.20% 1.70%
Expected life (years) 7 years 2 months 12 days 6 years 10 months 24 days 7 years 9 months 18 days
Dividend yield (percent) 1.00% 1.10% 1.90%
v3.25.0.1
Share-Based Payments - Stock Option Activity (Details)
$ / shares in Units, shares in Thousands, $ in Millions
 12 Months Ended
Dec. 31, 2024
USD ($)
$ / shares
shares
Shares  
Outstanding, beginning (in shares) | shares 853
Granted (in shares) | shares 64
Exercised (in shares) | shares (77)
Outstanding, ending (in shares) | shares 840
Exercisable, ending (in shares) | shares 686
Weighted- Average Exercise Price per Share  
Outstanding, beginning (in dollars per share) | $ / shares $ 49.52
Granted (in dollars per share) | $ / shares 74.20
Exercised (in dollars per share) | $ / shares 31.66
Outstanding, ending (in dollars per share) | $ / shares 53.05
Exercisable, ending (in dollars per share) | $ / shares $ 50.72
Weighted- Average Remaining Life (Years)  
Weighted-Average Remaining Life (Years), Outstanding 5 years 1 month 6 days
Weighted-Average Remaining Life (Years), Exercisable 4 years 3 months 18 days
Aggregate Intrinsic Value  
Aggregate Intrinsic Value, Outstanding | $ $ 33.0
Aggregate Intrinsic Value, Exercisable | $ $ 28.6
v3.25.0.1
Share-Based Payments - Summary of Restricted Stock Awards (Details) - Restricted Stock - $ / shares
shares in Thousands
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Shares      
Nonvested shares, Beginning Balance (in shares) 706    
Granted (in shares) 620    
Vested (in shares) (481)    
Forfeited (in shares) (41)    
Nonvested shares, Ending Balance (in shares) 804 706  
Weighted-Average Grant Date Fair Value      
Nonvested shares, Beginning Balance (in dollar per share) $ 63.60    
Granted (in dollar per share) 61.67 $ 65.20 $ 74.08
Vested (in dollar per share) 65.39    
Forfeited (in dollar per share) 61.52    
Nonvested shares, Ending Balance (in dollar per share) $ 61.14 $ 63.60  
v3.25.0.1
Employee Benefit Plans (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2024
USD ($)
yr
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Defined Contribution Plan Disclosure [Line Items]      
Company healthcare plan costs, net of employee payments $ 227.4 $ 186.2 $ 174.5
Employer contributions 32.1 31.3 28.7
Employer contributions funded by forfeited accounts 2.9 1.1 1.4
Payments under the Senior Management Bonus Program $ 28.1 $ 27.9 $ 14.5
Encompass Health Retirement Investment Plan      
Defined Contribution Plan Disclosure [Line Items]      
Contribution as percentage of salary allowed under the Plan (percent) 100.00%    
Age requirement to participate in the Plan | yr 21    
Employer matching contribution 50.00%    
Vesting percentage in employer contributions (percent) 6.00%    
Vesting percentage 100.00%    
Vesting period 3 years    
v3.25.0.1
Income Taxes - Components of Provision for Income Tax Expense (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Current:      
Federal $ 111.0 $ 101.7 $ 58.7
State and other 28.5 26.6 13.5
Total current expense 139.5 128.3 72.2
Deferred:      
Federal 8.6 (0.7) 17.9
State and other 2.1 4.6 10.0
Total deferred expense 10.7 3.9 27.9
Total income tax expense related to continuing operations $ 150.2 $ 132.2 $ 100.1
v3.25.0.1
Income Taxes - Reconciliation of Effective Income Tax Rate (Details)
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Income Tax Disclosure [Abstract]      
Tax expense at statutory rate (percent) 21.00% 21.00% 21.00%
Increase (decrease) in tax rate resulting from:      
State and other income taxes, net of federal tax benefit (percent) 3.90% 4.10% 4.00%
Increase in valuation allowance (percent) 0.00% 0.30% 0.60%
Noncontrolling interests (percent) (3.80%) (4.00%) (4.40%)
Share-based windfall tax benefits (percent) (1.00%) 0.00% 0.00%
Other, net (percent) (0.10%) 0.40% 1.00%
Income tax expense (percent) 20.00% 21.80% 22.20%
v3.25.0.1
Income Taxes - Deferred Tax Asset and Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Deferred income tax assets:    
Net operating loss $ 8.8 $ 23.1
Insurance reserve 20.9 20.1
Stock-based compensation 24.0 21.4
Revenue reserves 8.0 7.6
Operating lease liabilities 7.9 8.8
Other accruals 29.4 26.2
Tax credits 17.0 14.6
Total deferred income tax assets 116.0 121.8
Less: Valuation allowance (21.0) (28.4)
Net deferred income tax assets 95.0 93.4
Deferred income tax liabilities:    
Intangibles (63.4) (62.6)
Operating lease right-of-use assets (6.8) (7.8)
Property, net (18.8) (18.1)
Carrying value of partnerships (110.9) (91.7)
Other (0.3) (0.2)
Total deferred income tax liabilities (200.2) (180.4)
Net deferred income tax liabilities $ (105.2) $ (87.0)
v3.25.0.1
Income Taxes - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Valuation Allowance [Line Items]    
Changes to valuation allowance during the period $ (7.4) $ (7.4)
Remaining valuation allowance 21.0 $ 28.4
State    
Valuation Allowance [Line Items]    
Net operating loss $ 8.8  
v3.25.0.1
Earnings Per Common Share - Computation of Basic and Diluted Earnings per Common Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Numerator:      
Income from continuing operations $ 599.4 $ 475.0 $ 350.7
Less: Net income attributable to noncontrolling interests included in continuing operations (140.9) (111.0) (93.6)
Less: Income from continuing operations allocated to participating securities (2.8) (2.4) (1.1)
Income from continuing operations attributable to Encompass Health common shareholders 455.7 361.6 256.0
(Loss) income from discontinued operations, net of tax (2.8) (12.0) 15.2
Less: Net income attributable to noncontrolling interests included in discontinued operations 0.0 0.0 (1.3)
Less: Income from discontinued operations allocated to participating securities 0.0 0.0 (0.1)
(Loss) income from discontinued operations attributable to Encompass Health common shareholders (2.8) (12.0) 13.8
Net income attributable to Encompass Health common shareholders $ 452.9 $ 349.6 $ 269.8
Denominator:      
Basic weighted average common shares outstanding (in shares) 99.9 99.5 99.2
Basic earnings per share attributable to Encompass Health common shareholders:      
Continuing operations (in dollars per share) $ 4.56 $ 3.63 $ 2.58
Discontinued operations (in dollars per share) (0.03) (0.12) 0.14
Net income (in dollars per share) $ 4.53 $ 3.51 $ 2.72
Numerator:      
Income from continuing operations $ 599.4 $ 475.0 $ 350.7
Less: Net income attributable to noncontrolling interests included in continuing operations (140.9) (111.0) (93.6)
Income from continuing operations attributable to Encompass Health common shareholders 458.5 364.0 257.1
(Loss) income from discontinued operations, net of tax (2.8) (12.0) 15.2
Less: Net income attributable to noncontrolling interests included in discontinued operations 0.0 0.0 (1.3)
(Loss) income from discontinued operations attributable to Encompass Health common shareholders (2.8) (12.0) 13.9
Net income attributable to Encompass Health common shareholders $ 455.7 $ 352.0 $ 271.0
Denominator:      
Diluted weighted average common shares outstanding (in shares) 102.2 101.3 100.4
Diluted earnings per share attributable to Encompass Health common shareholders:      
Continuing operations (in dollars per share) $ 4.49 $ 3.59 $ 2.56
Discontinued operations (in dollars per share) (0.03) (0.12) 0.14
Net income (in dollars per share) $ 4.46 $ 3.47 $ 2.70
v3.25.0.1
Earnings per Common Share - Reconciliation Between Basic and Diluted Weighted-average Common Shares Outstanding (Details) - shares
shares in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Earnings Per Share [Abstract]      
Basic weighted average common shares outstanding (in shares) 99.9 99.5 99.2
Restricted stock awards, dilutive stock options, and restricted stock units (in shares) 2.3 1.8 1.2
Diluted weighted average common shares outstanding (in shares) 102.2 101.3 100.4
v3.25.0.1
Earnings Per Common Share - Additional Information (Details) - USD ($)
 3 Months Ended 7 Months Ended 12 Months Ended 25 Months Ended 37 Months Ended
Sep. 30, 2024
Sep. 30, 2022
Sep. 30, 2019
Jan. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Jul. 31, 2024
Jul. 31, 2022
Jul. 24, 2024
Oct. 28, 2013
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]                      
Antidilutive shares excluded from computation of diluted weighted-average shares (in shares)           300,000 400,000        
Dividends declared on common stock (in dollars per share) $ 0.17 $ 0.15 $ 0.28   $ 0.64 $ 0.60 $ 0.86 $ 0.15 $ 0.28    
Cash dividends paid per common share (in dollars per share)               $ 0.15 $ 0.28    
Subsequent Event                      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]                      
Dividends declared on common stock (in dollars per share)       $ 0.17              
Cash dividends paid per common share (in dollars per share)       $ 0.17              
Common Stock                      
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]                      
Common stock repurchase authorization                   $ 500,000,000 $ 200,000,000
Common stock remaining of stock repurchase authorized         $ 489,000,000            
Stock repurchased (in shares)         400,000            
Stock repurchased         $ 31,100,000            
Common stock repurchased (in shares)           0 0        
v3.25.0.1
Contingencies and Other Commitments (Details)
$ in Millions
Dec. 31, 2024
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2025 $ 60.4
2026 39.6
2027 31.6
2028 25.8
2029 21.8
Thereafter $ 50.9
v3.25.0.1
Segment Reporting - Additional Information (Details)
 12 Months Ended
Dec. 31, 2024
segment
Segment Reporting [Abstract]  
Number of operating segments 1
Number of reportable segments 1
v3.25.0.1
Segment Reporting - Selected Financial Information of Reportable Segments (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting Information [Line Items]      
Net operating revenues $ 5,373.2 $ 4,801.2 $ 4,348.6
Less:      
Salaries and benefits 2,901.0 2,600.1 2,393.3
Other operating expenses 802.6 719.1 670.4
Supplies 239.0 218.3 202.1
Occupancy costs 57.3 56.3 54.7
General and administrative expenses 209.2 201.7 154.3
Net income attributable to noncontrolling interests 140.9 111.0 94.9
Adjusted EBITDA 1,103.7 971.1 819.3
Inpatient Rehabilitation      
Segment Reporting Information [Line Items]      
Net operating revenues 5,373.2 4,801.2 4,348.6
Less:      
Salaries and benefits 2,901.0 2,600.1 2,393.3
Other operating expenses 785.2 709.3 665.6
Supplies 239.0 218.3 202.1
Occupancy costs 57.3 56.3 54.7
General and administrative expenses 156.1 146.5 130.4
Net income attributable to noncontrolling interests 148.2 113.2 93.6
Other (income) expense (17.3) (13.6) (10.4)
Adjusted EBITDA $ 1,103.7 $ 971.1 $ 819.3
v3.25.0.1
Segment Reporting - Reconciliation of Adjusted EBITDA (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting [Abstract]      
Adjusted EBITDA $ 1,103.7 $ 971.1 $ 819.3
Stock-based compensation (48.3) (50.6) (29.2)
Depreciation and amortization (299.6) (273.9) (243.6)
Loss on disposal or impairment of assets (17.4) (9.8) (4.8)
Loss on early extinguishment of debt (0.6) 0.0 (1.4)
Interest Expense, Debt (137.4) (143.5) (175.7)
Less: Net income attributable to noncontrolling interests included in continuing operations 140.9 111.0 93.6
Change in fair market value of equity securities 1.0 0.7 (7.4)
Asset impairment impact on noncontrolling interests 7.3 0.0 0.0
State regulatory change impact on noncontrolling interests 0.0 2.2 0.0
Income from continuing operations before income tax expense $ 749.6 $ 607.2 $ 450.8
v3.25.0.1
Segment Reporting - Revenues of Operating Segments by Service Line (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Segment Reporting, Revenue Reconciling Item [Line Items]      
Net operating revenues $ 5,373.2 $ 4,801.2 $ 4,348.6
Inpatient      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Net operating revenues 5,230.5 4,693.8 4,251.6
Outpatient and other      
Segment Reporting, Revenue Reconciling Item [Line Items]      
Net operating revenues $ 142.7 $ 107.4 $ 97.0