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Segment Reporting
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
Our internal financial reporting and management structure is focused on the major types of services provided by Encompass Health. We manage our operations using two operating segments which are also our reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. These reportable operating segments are consistent with information used by our chief executive officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments:
•Inpatient Rehabilitation - Our national network of inpatient rehabilitation hospitals stretches across 35 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of March 31, 2021, we operate 138 inpatient rehabilitation hospitals. We are the sole owner of 86 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 52 jointly owned hospitals. In addition, we manage four inpatient rehabilitation units through management contracts. We provide specialized rehabilitative treatment on both an inpatient and outpatient 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.
•Home Health and Hospice - As of March 31, 2021, we provide home health services in 241 locations and hospice services in 82 locations across 31 states with concentrations in the southern half of the United States. In addition, one of these home health agencies operates as a joint venture which we account for using the equity method of accounting. We are the sole owner of 317 of these locations. We retain 50.0% to 81.0% ownership in the remaining six jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support.
    The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements accompanying the 2020 Form 10‑K. All revenues for our services are generated through external customers. See Note 1, Basis of Presentation, “Net Operating Revenues,” for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our chief operating decision maker evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”).
Selected financial information for our reportable segments is as follows (in millions):
Inpatient RehabilitationHome Health and Hospice
Three Months Ended March 31,Three Months Ended March 31,
2021202020212020
Net operating revenues$959.9 $909.2 $270.5 $272.8 
Operating expenses:
Inpatient rehabilitation:
Salaries and benefits
501.9 482.3 — — 
Other operating expenses
140.0 134.7 — — 
Supplies
45.2 39.6 — — 
Occupancy costs
15.1 15.3 — — 
Home health and hospice:
Cost of service (excluding depreciation and amortization)— — 118.1 130.9 
Support and overhead costs
— — 101.4 100.2 
702.2 671.9 219.5 231.1 
Other (income) expense(1.5)1.6 — — 
Equity in net income of nonconsolidated affiliates
(0.8)(0.6)(0.2)(0.2)
Noncontrolling interests25.1 20.8 0.4 0.9 
Segment Adjusted EBITDA
$234.9 $215.5 $50.8 $41.0 
Capital expenditures$99.8 $83.3 $0.9 $1.5 
Segment reconciliations (in millions):
Three Months Ended March 31,
20212020
Total Segment Adjusted EBITDA$285.7 $256.5 
General and administrative expenses(38.6)(35.6)
Depreciation and amortization(62.5)(58.8)
Gain (loss) on disposal or impairment of assets0.1 (0.1)
Government, class action, and related settlements— (2.8)
Interest expense and amortization of debt discounts and fees(42.8)(43.2)
Net income attributable to noncontrolling interests25.5 21.7 
Change in fair market value of equity securities(0.1)(2.5)
Gain on consolidation of joint venture formerly accounted for under the equity method of accounting— 2.2 
Payroll taxes on SARs exercise— (1.5)
Income from continuing operations before income tax expense$167.3 $135.9 
Additional detail regarding the revenues of our operating segments by service line follows (in millions):
Three Months Ended March 31,
20212020
Inpatient rehabilitation:
Inpatient$942.3 $890.0 
Outpatient and other17.6 19.2 
Total inpatient rehabilitation959.9 909.2 
Home health and hospice:
Home health219.9 224.8 
Hospice50.6 48.0 
Total home health and hospice270.5 272.8 
Total net operating revenues$1,230.4 $1,182.0