All right. We're going to get started here. Good afternoon, everybody. We're going to wrap up the day here with Gentiva. We've got Eric Slusser, the company's CFO, presenting. With that, let me turn it over to Eric.
Eric R. Slusser
Thank you. Let's -- I'm Eric Slusser, CFO with Gentiva Health Services. I want to talk a little bit about our company and what's going on with Gentiva. This is just our standard forward-looking statement, that we may talk about some forward-looking information and you should just be cautious as to the level of reliance you place on that beyond what you hear here today.
A little bit of a company overview. Gentiva, if you don't know, we're a nationwide home health and hospice provider. We serve primarily the Medicare population. Our average age of our patient is 79 years old. At any one time, we are serving 85,000 patients a day across 425 locations throughout 40 different states in the U.S. We employ slightly above 15,000 full-time employees at any one time.
Today, our revenue mix is right about 55:45, between home health and hospice, again post-Odyssey acquisition from a couple of years ago, a much more balanced revenue stream within our business.
This map is a footprint. As you can see, we are dense in certain places. We have found from an operational perspective, it works much better for our business where we have scale and density. The blue states here are what we call certificate of need states. In other words, there's a limitation and barrier to entry. Those are much more friendlier operating environments. Again, it's a limited entry. You tend to have a limited number of providers providing care in those locations. Just tends to be a much better controlled and organized spaces to operate within the states.
In our industry, we focus on really 4 primarily drivers, first being the aging population. With Medicare now and the baby boomers, there are 10,000 people a day that becoming eligible for Medicare services. So there's a significant growing runway in the home health and hospice environment.
We're also the lowest cost setting from the acute to the post-acute care environment. Clearly, home health is the lowest cost setting. When you look across that continuum of care, it's become much more clinically sophisticated in the last 10 years. There's very little that can't be done in the home, coming straight out of acute hospital setting. So again, sophistication, we continue across the board to develop programs and work with the government to do more things from a clinical perspective in the home than we've seen in the past. And finally, it's patient preferred. It's where the patient wants to be. It's the safest place, the least amount of risk of ongoing infection and other things you see in other acute settings.
Our key long-term growth initiatives, again, I talked about the clinical. We continue to invest in clinical delivery and our clinical programs or specialty programs. We continue to develop new things and ways to treat seniors in the home, given the growing demand for those services. We continue to expand our referral base. If you followed us over the last couple of years, we've continued to put significant sales feet on the ground to expand our admissions and referral base, so a significant focus in that area.
With the acquisition of Odyssey in those 425 locations, we have 94 overlapping home health and hospice locations. We continue to look at the synergies between those businesses and how patients go from home health to hospice and back and forth, so that's a key focus.
And then finally, acquisitions. We did a few acquisitions last year, small. We'll continue to look at acquisitions that are a strategic fit with our company, that give us better density in the places we're already at. But again, as we've said last year, we're being very strategic and very selective in what we look at.
From an M&A, just a quick update. Again, looking at tuck-in things, things that continue to offer growth, we don't want to buy businesses that have kind of maxed their market out. We're looking for growth opportunities that are a logical fit with where we're at. We had, as I mentioned, 3 acquisitions last year: Advocate Hospice in Indiana; Family Home Care in Washington; and North Mississippi Hospice, all of which fit those parameters we look at for tuck-in acquisitions.
From a financial perspective, a few highlights. Fourth quarter, you'll see a lot of brackets here, a decline, some of this was expected. In the fourth quarter of '11, we announced an initiative to close or sell about 59 home health and hospice locations, many of which didn't fit in with our strategic directive and weren't at a sufficient profitability level so they were sold or closed. So year-over-year, there's about a $70 million of revenue comp difference with those locations that were closed. The other thing we had was north of a 5% home health rate reduction for 2012. So that had a pretty significant impact.
But overall, we're very pleased with the results for the year, from an overall growth perspective. And I'll talk a little bit about our 2 divisions in a minute. But from an EPS perspective, we came out at the beginning of the year with guidance of $1 to $1.20, raised that going into the fourth quarter to $1.20 to $1.30, and they were able to finish in the top end of that range. So very pleased with our results in an otherwise very challenging regulatory environment and also in the wake of very significant rate cuts over the last 2 years.
From a division perspective, home health continued to show strong growth in the fourth quarter and for the year. They've had mid-single-digit, 5%, 6% growth, and have also led the industry for the last 6 quarters. I talked about the family home care acquisition.
From a hospice perspective, we've talked about on our calls, hospice continues to be challenging. We continue to focus on admission growth in that business, including a significant overhaul of our sales plan and our sales force throughout 2012. As we talked about on our year-end call, we started to see traction in our sales admissions through the first 3 weeks of December and then through all 4 weeks of January, ahead of our earnings release call. So while a month doesn't make the year, we're pleased to finally see the efforts from significant changes in our sales process and sales force come to fruition as we lead into the early part of 2013.
From a balance sheet perspective, we finished the year with a very, very strong cash balance at $207 million, very, very strong cash flow throughout the year. From a debt perspective, we have paid down $25 million of debt subsequent to year end, so further pay down on the debt. Again, free cash flow in the quarter was $48 million, in the range of $128 million for the year. So very, very strong cash flow for our business in the year. The DSO, or days sales outstanding, were down to 51 by the end of the year. So significant cash flow driven by operations and working capital management throughout the year.
If you look at this schedule, it shows our cash flow by quarter. First quarter, negative. That is somewhat expected as somewhat seasonal. At the first quarter, you have 3 things that go on in our business. You have the payment of your annual sales, incentives, commissions and bonus payments for the whole company. So you have a big accrual shift related to that payment. Our bond interest payment, which is twice a year, falls in the first quarter. And then finally, we had a debt payment last year in the first quarter. And so you can see, as we progressed through the year, beyond that and finished up with $114 million of free cash flow, which is after the debt payments that we had during the year.
From a cash deployment perspective, for the year, $53 million of paydown, very balanced. We spent about $22 million on those 3 acquisitions we made. Our CapEx is kind of leveled off to a $12 million to $15 million range. So CapEx is at a minimum level, mostly involved with some office buildout things when we enter into a new lease or some of our IT initiatives. Finally, we had $5 million of stock buyback. We're capped in our debt agreements at $5 million annually, and we exercised that amount last year.
From a reimbursement, there's a lot of talk going on with what's going on with reimbursement, where do we stand. Today, as you know, the American Tax Relief Act was passed. Sequestration was postponed as part of that from January 1 to March 1. The physician fix was delayed for a year and there were no home health or hospice payments or reductions as a part of that act. The key things that are still out there, sequestration went into effect March 1. And so as we stand here today, sequestration is real. The debt ceiling expires here in a short period of time. There's still some question as to what will happen there. You also got the Federal budget as they continue to address that deal with that.
And then finally, rebasing has been out there since 2010 as part of the Affordable Care Act. It is our estimation that when CMS comes out in June or July with the proposed home health rates for '14, that the concept of whatever rebasing may mean will be built into that proposal. So for the first time in several years we expect, once we get to midyear, that we may have some level of clarity, again, that we just haven't had in the past few years.
Finally, our partnership continues to be very active in Washington, around anything and everything going on in the home health space, actively lobbying every day, meeting with congressmen, meeting with CMS to talk about what's going on and better promote the home health cause and the benefits of home health.
This slide here is our Medicare reimbursement. All of this is final. It shows the impacts to both home health and hospice before sequestration. All of this was final prior to year end. Hospice before sequestration was just right at a 1% increase. Based on the way it's calculated and scheduled on home health, it was a minus 0.4% decrease. I will tell you, as with past things, there were changes in coding, therapy and coding and other things. Within that changes in the reimbursement structure that were meant to be budget-neutral but still impact every company differently, as we talked about on our year-end call, while it calculates out to a minus 0.4%, we're seeing closer to a minus 1% impact from the rate reduction. So adding on the 2% of sequestration, you get to about a minus 1.1% for hospice and probably somewhere around a 3% rate impact for home health for 2013.
So sequestration, what do we know today? Gentiva has not put out guidance for 2013 because of the unknown items around sequestration. What we know today is that it's now in effect. All along, CMS had said that they wouldn't put out any regulation until it was actually in effect. We have started to see some things come out. Particularly, there's been the unknown around home health and how that's going to be implemented. But what we do know today, it's going to be effective April 1. It's going to be a reduction in reimbursement as opposed to a reduction in rate. So all reimbursements that come back through the intermediaries from April 1 on, they will just withhold 2% rather than reducing the rate 2%. So we'll still bill at the original rate and they'll do the withholding at the reimbursement point.
The other really unknown that has held us up is on the home health side and the clarity as to whether they were going to withhold that on episodes that end after April 1 or episodes that start after April 1. We have been going back and forth with CMS as an industry. It would appear based on some clarification we got just this morning that it's going to be treated similar to the rate reductions and that it will impact episodes that end on or after April 1. So you will have some late February and March episodic revenues that will be impacted by the sequestration cut effective April 1.
Just to conclude here, for investment highlights for our industry overall. Again, the demographics are compelling. The aging population is increasing significantly every day. Clearly, this is the lowest cost setting. It's patient-preferred. And there is significant long-term demand and growth opportunity in our industry. It continues to be highly fragmented. There are significant number of small home health and hospice agencies that continue to see pressure from these rate cuts. So we think the industry will continue to be ripe for consolidation.
And finally, we are expanding our voice. So we're now going on 3 years with our own partnership in D.C. As I talked about earlier, that is very, very active on a day-to-day basis, lobbying on behalf of home health. From a Gentiva perspective, we have a long-term, very good operating track record. We've been able to manage through these last 3 years of significant rate cuts, significant headwinds and continued to put up good results, very, very strong cash flows, as I talked about earlier. The management team, combined number of years of experience of the team is very significant at the leadership level, so a well-seasoned management team. They've been through these ups and downs several times before that we've seen in the last couple of years. So we believe we're well-positioned to play that -- with our strength, to play that role of a consolidator and leading this industry.
With that, that concludes my presentation. I'd like to thank you for listening to our Gentiva story and the opportunity to present to you today. Thank you.
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