The Pennant Group Inc. (Nasdaq: PNTG) is investing in technology to meet rising demand as its hospice and home health segment swells. Meanwhile, the company is navigating recent regulatory changes to improve program integrity.
Artificial intelligence (AI) is a “key focus area” for the company when it comes to boosting revenue, quality and operational efficiency, Pennant CEO Brent Guerisoli said in a recent earnings call.
Pennant is piloting AI tools that reduce clinical documentation time and automate back-office processes, Guerisoli indicated. Leveraging these technologies could help increase the company’s clinical capacity and reduce indirect administrative costs, he said.
“Specifically related to using AI and the tools available, they are going to be critical to delivering more effective, more efficient care,” Guerisoli said. “We’ve spent a significant amount of money and investment in driving and elevating performance from a technology standpoint. There’s a huge opportunity … we believe it’s part of our future. Ultimately, we would expect to see improved quality outcomes and improved financial outcomes as a result of these investments we’re making on the technology front.”
Pennant is the holding company for an affiliated group of independent hospice, home health and senior living providers. The Idaho-based company has 175 hospice and home health providers and 69 senior living communities across 13 states.
Pennant’s overall revenue reached $298 million in the second quarter, rising 35.8% year over year. The company’s consolidated adjusted EBITDA for that period was $24.3 million, increasing by $7.9 million compared to Q2 in 2025.
Pennant’s senior living segment revenue was $60.2 million, seeing a 12.6% increase compared to the same period in 2025.
Hospice and home health service revenue at Pennant hovered around $237.8 million in Q2 this year, representing a 43.2% year-over-year increase. The company’s hospice average daily census reached 5,477 patients during that period.
Pennant’s hospice and home health footprint swelled when the company recently closed its $146.5 million acquisition of divested assets of former Amedisys and UnitedHealth Group (NYSE: UNH). The company has focused on integrating the new assets, which included 54 hospice and home health locations in Alabama, Georgia and Tennessee.
The company’s “rigorous investment and innovation” has helped it thrive through a challenging reimbursement and regulatory environment in recent years COO of Pennant
Having a locally-driven, community-based growth approach has been key to Pennant’s home health and hospice expansion and sustainability, Gochnour said during the earnings call. The ability to meet rising demand for these services hinges upon understanding community needs and developing strong referral relationships.
Building community and referral trust is increasingly important amid increased program integrity concerns in the hospice space, Gochnour indicated. Hospices are facing significant challenges as regulators work to curb fraud, waste and abuse among some illegitimate providers.
Among the most recent moves came when the U.S. Centers for Medicare & Medicaid Services (CMS) finalized the 2027 hospice payment rule. The final rule establishes a service and spending variation index (SSVI), designed to better identify and eliminate fraudulent practices.
Though necessary, the final rule’s new program integrity measures may increase hospices’ compliance and administrative costs Hospice providers need to work closely to advocate for regulatory change that better detects fraudsters and improves public and referral trust. Having strong compliance and quality are a cornerstone for hospice growth and sustainability, he said
“The hospice industry is currently the subject of intense scrutiny because of the significant fraud and abuse issues perpetrated by bad actors in California and elsewhere,” Gochnour said. “While they’ve created new administrative costs, we understand and support the need for program integrity measures that will help lawmakers and regulators pinpoint and punish fraudsters. By identifying and isolating bad actors, funds can be redirected to providers like Pennant, who deliver great care in a compliant manner. We are well-equipped to thrive through this dynamic regulatory environment.”
