CHE · 10-Q · 2026Q1 · Full report

Customer Payment Timing / AR Volatility

CHEMED CORP · 2026-04-28 · Importance 70 · Surprise 56

Accounts receivable increased $32.9 million from December 31, 2025 to March 31, 2026 due to timing of payments, driven largely by federal Medicare payment scheduling at the VITAS subsidiary. The company typically receives a payment in excess of $62.0 million from the Federal government for hospice services every other Friday, so period-end timing materially affects receivables and cash. Management states these timing-driven AR fluctuations generally normalize over a two-year period as year-to-year cash flow variations offset. Days of revenue outstanding improved (excluding unapplied Medicare payments) from 47.3 to 38.8 days, reflecting the timing sensitivity of receivables reporting.

Key facts

• Company typically receives a payment in excess of $62.0 million from the Federal government for hospice services every other Friday
• Estimated uncollectible accounts as a percent of revenues for VITAS were 1.2% for the three months ended March 31, 2026 versus 0.6% in prior year
• Accounts receivable increased $32.9 million from December 31, 2025 to March 31, 2026 due to the timing of payments
• VITAS days of revenue outstanding excluding unapplied Medicare payments: 38.8 days for the three months ended March 31, 2026 versus 47.3 days in prior year
• VITAS days of revenue outstanding including unapplied Medicare payments: 33.6 days for the three months ended March 31, 2026 versus 44.5 days in prior year
• Accounts receivable timing changes generally normalize over a two-year period

Impact estimates