Select Medical Holdings Corporation (SEM): PESTLE Analysis [Nov-2025 Updated]

You're looking at Select Medical Holdings Corporation (SEM) and seeing a strong revenue outlook-projected between $5.3 billion and $5.5 billion for the full year 2025-but that's only half the story. The post-acute care market is a high-wire act, where demand from an aging US population is constantly battling the twin pressures of shifting Centers for Medicare & Medicaid Services (CMS) reimbursement rules and severe labor inflation, squeezing Adjusted EBITDA guidance to a tight $510.0 million to $530.0 million range. We'll break down the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) factors, showing you where SEM's growth capital-up to $200 million in 2025-is heading, and what regulatory shifts pose the biggest near-term risk to your investment thesis.

Select Medical Holdings Corporation (SEM) - PESTLE Analysis: Political factors

Shifting Centers for Medicare & Medicaid Services (CMS) rules create constant reimbursement uncertainty.

You know the drill: the Centers for Medicare & Medicaid Services (CMS) is the single most powerful factor in post-acute care, and its rule-making process guarantees constant uncertainty. Select Medical Holdings Corporation operates largely within the Medicare ecosystem, so any change to the Inpatient Rehabilitation Facility Prospective Payment System (IRF-PPS) or the Outpatient Prospective Payment System (OPPS) directly hits the bottom line. The IRF-PPS standard payment conversion factor for fiscal year 2025 was set at $18,907, an increase from the prior year, but this modest bump is often offset by other policy adjustments and the rising cost of care.

The core issue is that Medicare payment rate increases frequently lag behind the actual cost of providing care. For 2025, the Medicare Economic Index (MEI), which tracks the cost of running a medical practice, is projected to increase by 3.5%. Meanwhile, physicians faced a 2.83% reduction in payments under the 2025 Medicare Physician Payment Final Rule, creating a widening financial gap for providers. This is a tough environment to manage. Your strategic team spends a lot of time just trying to forecast the next rule change.

A recent CMS rule delay provided a one-time, favorable financial benefit in the third quarter of 2025.

Sometimes, a regulatory delay acts like a temporary dividend. Select Medical experienced this in the third quarter of 2025 (Q3 2025) when CMS deferred the implementation of its expanded Medicare outlier reconciliation criteria, often called the '20% transmittal rule.' This delay, which pushed the rule's effective date back to October 2025, resulted in a favorable revenue adjustment recorded during the quarter.

This one-time benefit helped Select Medical report strong Q3 2025 results, with consolidated revenue reaching $1.36 billion and earnings per common share (EPS) from continuing operations rising to $0.23. That's a 7.2% year-over-year revenue growth. But honestly, you can't build a long-term strategy on regulatory pauses; you have to plan for the eventual cut.

Government healthcare reform proposals, like Site-Neutral Payments, pose a risk of decreased program reimbursement.

The biggest near-term legislative risk is the push for site-neutral payments, a policy designed to pay the same rate for the same service regardless of the care setting. This directly targets the higher reimbursement rates Select Medical receives for services provided in its hospital outpatient departments compared to a physician's office.

The final Calendar Year (CY) 2026 Outpatient Prospective Payment System (OPPS) rule is a clear example of this trend. CMS finalized a policy to pay for drug administration services in off-campus hospital outpatient departments at the site-neutral rate, which is only 40% of the OPPS rate. CMS estimates this policy will cut OPPS spending by approximately $290 million in CY 2026. This is a direct headwind for your outpatient rehabilitation segment, which already faces margin pressure.

Political stability is crucial; a change in administration could drastically alter the Affordable Care Act (ACA) landscape.

The political environment following the 2024 election remains a high-stakes variable. A change in administration and a unified government, as seen in late 2025, creates the potential for major legislative shifts. The most immediate risk is the enhanced Affordable Care Act (ACA) premium subsidies, which are set to expire at the end of 2025.

If Congress allows these subsidies to lapse, the Congressional Budget Office (CBO) estimates ACA marketplace enrollment could drop from 22.8 million in 2025 to 18.9 million in 2026. For a healthcare provider like Select Medical, a drop of nearly 4 million insured individuals means a corresponding shift in payer mix toward more uninsured or underinsured patients. This increases bad debt and reduces revenue per case across the board.

A second, more aggressive change in the ACA's regulatory enforcement, such as promoting alternative coverage options like Short-Term Limited Duration Insurance (STLDI) plans, could also dilute the quality of commercial coverage, ultimately pressuring provider margins.

The regulatory environment is the single biggest short-term risk.

Look, the regulatory environment is defintely the single biggest short-term risk for Select Medical Holdings Corporation. It's more volatile than labor costs right now.

The risk isn't just a single cut; it's the cumulative effect of multiple, simultaneous policy changes, each designed to shift costs or reduce utilization. Key short-term risks include:

• Expanded Site-Neutral Payments: Directly impacts the higher-margin hospital outpatient services.
• ACA Subsidy Expiration: Threatens to increase the uninsured population by millions in 2026.
• Fixed Loss Thresholds: Rising thresholds limit reimbursement for high-acuity, high-cost patients.
• Annual Medicare Cuts: The continued trend of Medicare payment updates lagging the 3.5% MEI inflation.

Your action item here is clear: Finance needs to model the impact of a 20% reduction in reimbursement for all outpatient drug administration services and a 15% rise in uncompensated care due to the ACA subsidy cliff by the end of the year.

Select Medical Holdings Corporation (SEM) - PESTLE Analysis: Economic factors

The 2025 full-year revenue outlook is strong, projected between $5.3 billion and $5.5 billion.

You're looking for a clear signal on Select Medical Holdings Corporation's (SEM) financial health, and the 2025 full-year revenue outlook provides it. Management has consistently reaffirmed its revenue guidance, projecting a range of $5.3 billion to $5.5 billion for the fiscal year. This forecast is underpinned by steady demand for post-acute care services, especially as the U.S. population ages, which drives the need for specialized rehabilitation.

To be fair, this growth isn't uniform. While the Inpatient Rehabilitation segment is a clear driver, the Critical Illness Recovery Hospitals segment faces ongoing reimbursement pressure. Still, the consolidated outlook is positive, showing the company's ability to execute its expansion strategy and offset headwinds in other areas.

Inflationary pressure is driving up labor and operating costs, squeezing Adjusted EBITDA margins.

The biggest near-term risk to profitability is the cost side of the equation, specifically labor inflation. While the extreme spikes seen during the pandemic have moderated, the salary, wage, and benefits expense remains a significant pressure point. For full-time employees in the inpatient division, the company is still experiencing approximately a 5% per annum increase in wages.

This inflationary environment, coupled with regulatory changes-like those impacting Medicare reimbursement in the Critical Illness Recovery Hospitals-is compressing the Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) margin. For example, the Critical Illness Recovery Hospitals segment saw its Adjusted EBITDA margin for the nine months ended September 30, 2025, drop to 10.8%, down from 12.9% in the prior year period. This is where the rubber meets the road; higher costs and lower reimbursement in one segment squeeze the overall margin.

Management reaffirmed 2025 Adjusted EBITDA guidance between $510.0 million and $530.0 million.

Despite the margin pressure, management has maintained a realistic and steady course, reaffirming the 2025 Adjusted EBITDA guidance between $510.0 million and $530.0 million. This stability is a strong indicator of effective cost management and the high-growth segments picking up the slack from the challenged areas.

Here's the quick math: at the midpoint of the revenue guidance ($5.4 billion) and the midpoint of the Adjusted EBITDA guidance ($520.0 million), the projected Adjusted EBITDA margin is around 9.6%. This is a slight dip from previous years, but it reflects a realistic assessment of the current economic and regulatory environment. The growth in the inpatient rehabilitation segment is defintely the key factor keeping this number firm.

Capital expenditures are focused on growth, with a 2025 range of $180 million to $200 million for new facilities.

The company is not pulling back on growth investment, which is a clear action signal. Capital expenditures (CapEx) are projected to be in the range of $180 million to $200 million for 2025, with a focus on new facilities and expansion. This is a strategic move, allocating capital to the fastest-growing and highest-margin segments to secure future revenue streams.

What this estimate hides is the long-term commitment. The CapEx is funding a multi-year development pipeline, not just 2025 projects. This disciplined spending ensures that the company is building capacity where demographic and market trends are most favorable.

Inpatient rehabilitation is the fastest-growing segment, expanding its bed count through 2027.

The economic engine for Select Medical is clearly the Inpatient Rehabilitation segment. This division saw a 17% year-over-year revenue increase in the second quarter of 2025, with an Adjusted EBITDA margin of 22.6%. That's a powerful margin that justifies the aggressive expansion.

The company is capitalizing on this trend by accelerating its development pipeline. This includes concrete plans to add approximately 382 rehab beds by mid-2027 through new hospital openings and expansions. This growth is a direct response to the aging U.S. population and the rising demand for specialized post-acute care services, making it a crucial long-term economic opportunity.

• Inpatient Rehabilitation revenue increased 17% year-over-year in Q2 2025.
• Adjusted EBITDA margin for the segment was 22.6% in Q2 2025.
• Planned expansion includes adding approximately 382 rehab beds by mid-2027.

Select Medical Holdings Corporation (SEM) - PESTLE Analysis: Social factors

The aging US population is the primary demand driver for post-acute and rehabilitation services.

The core social driver for Select Medical Holdings Corporation is the rapid aging of the United States population. This demographic shift creates a non-cyclical, long-term demand floor for the company's specialized services, including critical illness recovery and intensive physical rehabilitation.

Here's the quick math: the U.S. population aged 65 and older is projected to reach approximately 62.7 million in 2025, representing about 18.6% of the total population. This segment is not just large; it's growing fast, with forecasts showing a 14.2% expansion to 71.6 million by 2030. This is the patient pool that requires post-acute care (PAC) after major medical events, driving the need for Select Medical's facilities.

The sheer volume of complex cases-strokes, major orthopedic surgeries, and prolonged critical illnesses-means the demand for high-acuity post-acute care is defintely increasing, providing a strong tailwind for revenue growth in the rehabilitation hospital segment.

The company operates a vast network of 105 critical illness recovery hospitals and 1,922 outpatient clinics across 40 states.

Select Medical's expansive operational footprint is a key social asset, enabling it to serve this dispersed and growing senior population across the country. As of September 30, 2025, the company's network spanned 40 states and the District of Columbia, making it one of the largest specialized healthcare providers in the U.S.

This wide reach helps capture market share and provides a geographic hedge against localized economic or regulatory shifts. The scale of the network also allows for the deployment of centralized clinical protocols, which is a major factor in maintaining quality of care across diverse locations.

Severe shortages of qualified nurses and therapists increase reliance on expensive contract labor.

While patient demand is strong, the most significant near-term risk remains the severe shortage of qualified clinical staff. This is a national healthcare crisis, and it forces Select Medical to increase its dependence on contract labor (travel nurses and therapists), which is significantly more expensive than employed staff.

For the first quarter of 2025, the company's total labor costs-a major component of operating expenses-rose to $1,172.6 million, representing 86.7% of revenue. This is up from 84.8% in the prior year, clearly illustrating the inflationary pressure from the labor market. The company has made progress in reducing contract labor utilization; for instance, in 2023, total contract labor costs dropped by approximately 62% compared to 2022, but the constant battle to sustain that trend is a continuous operational challenge.

Workforce retention is a constant battle.

Retaining staff is crucial to managing the high labor costs and maintaining quality of care. The high turnover rates seen across the healthcare industry mean that Select Medical must invest heavily in employee experience and career paths. The company recognizes that a shortage of qualified professionals could cause an increased dependence on contract labor and significantly increase operating costs.

To combat this, the company has concrete programs in place. For example, in 2023, the 'Go Anywhere with Us' retention program facilitated 5,000 intra-organizational job changes, showing a commitment to internal mobility as a retention tool. Plus, in that same year, they welcomed nearly 14,500 new employees, demonstrating the massive scale of their recruitment and backfill efforts.

Select Medical has received recognition in 2025 as a Greatest Workplace for Women and for Diversity.

A positive social reputation is a powerful competitive advantage in a tight labor market. Select Medical is proud to receive recognition in 2025 as a Greatest Workplace for Women and a Greatest Workplace for Diversity. This is important because it directly supports recruitment and retention efforts in a field where women and diverse populations make up a significant portion of the clinical workforce.

This recognition, based on large-scale surveys and research, signals to prospective employees that the company is actively fostering an inclusive culture. This is not just a feel-good metric; it's a strategic defense against the labor shortage, helping the company attract the best talent. The goal is simple: make the company the employer of choice for nurses and therapists.

• Attract diverse talent pool in a competitive market.
• Reduce voluntary turnover among key clinical staff.
• Reinforce the company's commitment to cultural norms of respect and empathy.

Select Medical Holdings Corporation (SEM) - PESTLE Analysis: Technological factors

Strategic investments are focused on telehealth and remote patient monitoring to extend care access.

You're watching a major shift in post-acute care, and Select Medical Holdings Corporation (SEM) is defintely leaning into it. The company's strategy explicitly names investments in technology upgrades, telehealth, and remote patient monitoring (RPM) as key components to enhance patient care and improve operational efficiency. This isn't just a buzzword play; it's a necessity to extend care access beyond their physical footprint, which, as of September 30, 2025, includes 105 critical illness recovery hospitals and 36 rehabilitation hospitals. The goal is simple: capture patient demand where it lives, especially for follow-up care.

Their full-year 2025 capital expenditure (CapEx) guidance is a narrowed range of $180 million to $200 million, and a significant portion of that is funding this digital expansion alongside new facility development. This focus allows them to manage patients with chronic conditions more effectively, reducing the likelihood of costly readmissions and improving overall outcomes. It's an investment that pays for itself in clinical and financial terms over the long run.

Increased use of data analytics is key to improving operational efficiency and patient outcomes.

The core of modern healthcare management is translating massive amounts of patient and operational data into clear, actionable insights. Select Medical is using data analytics to drive better operational efficiency. Here's the quick math: for the third quarter of 2025, the company reported an Operating Income of $72.9 million, which is a substantial 32.9% increase compared to the same period in the prior year. This improvement clearly signals that their focus on optimizing operations across all segments-from staffing models to supply chain-is working.

For a company with a projected 2025 revenue range of $5.3 billion to $5.5 billion, even minor efficiency gains, powered by better data, translate into tens of millions of dollars in bottom-line value. The goal is to move beyond mere reporting and use predictive analytics to anticipate staffing needs, manage patient flow, and ultimately, improve clinical pathways.

System upgrades and scheduling initiatives are underway to improve outpatient rehabilitation margins.

The Outpatient Rehabilitation segment is a major focus for technology-driven margin improvement. Management has stated that system upgrades and new scheduling initiatives are being rolled out to boost operational benefits. The division is targeting a future Adjusted EBITDA margin approaching 10%.

However, this is a near-term risk area. The segment's Q3 2025 performance showed a dip, with Adjusted EBITDA margin declining to 7.4% from 9.1% in the prior year's quarter. This drop was due to a combination of Medicare rate reductions and an unfavorable payer mix shift. So, the new technology-specifically the scheduling and platform enhancements-is a crucial lever to counteract external reimbursement pressures by maximizing therapist productivity and clinic utilization.

Cybersecurity risk is high due to the sensitive nature of patient health information (PHI).

In the healthcare sector, cybersecurity isn't just an IT problem; it's an existential business risk, and Select Medical is not immune. The sheer volume of sensitive patient health information (PHI) collected across its vast network of facilities makes it a prime target. This risk was realized in 2025 when the company began notifying individuals in June about a data breach at a third-party vendor, Nationwide Recovery Service.

The breach involved sensitive personal identifiable information and PHI, which an unauthorized party may have viewed and obtained between July 5 and July 11, 2024. This event underscores the critical need for a robust third-party risk management program and continuous investment in their cybersecurity framework, which is based on the National Institute of Standards and Technology (NIST) guidelines.

Digital integration is the new differentiator.

For a company operating at Select Medical's scale, seamless digital integration is the only way to maintain a competitive edge and justify its full-year 2025 Adjusted EBITDA guidance of $510 million to $530 million. The operational footprint is massive, spanning 40 states and the District of Columbia.

Effective digital integration means linking all 1,922 outpatient rehabilitation clinics and its hospitals with a unified electronic health record (EHR) and centralized data analytics platform. This level of connectivity is what enables the strategic initiatives we've discussed:

• Centralize patient records for continuity of care.
• Standardize data for system-wide efficiency analysis.
• Support the expansion of telehealth and RPM services.
• Streamline billing and scheduling to boost margins in outpatient rehab.

Without this integration, their growth strategy-which includes adding 395 inpatient rehab beds by 2027-would become unwieldy and financially inefficient. It's the infrastructure that makes the growth possible.

Select Medical Holdings Corporation (SEM) - PESTLE Analysis: Legal factors

Strict compliance with the Health Insurance Portability and Accountability Act (HIPAA) and HITECH Act is mandatory.

You simply cannot operate a healthcare business of this scale without facing constant, intense scrutiny over patient data. Select Medical Holdings Corporation's (SEM) massive footprint-operating in 40 states and the District of Columbia as of September 30, 2025-makes it a prime target for data security incidents and subsequent litigation. The cost of non-compliance is staggering, and the risk is real.

A recent example is the data security incident involving a former vendor, Nationwide Recovery Services, Inc., which led to unauthorized access between July 5 and July 11, 2024. Select Medical Holdings Corporation began mailing notification letters to affected individuals by June 6, 2025, and is now facing class-action lawsuits. The Health Information Technology for Economic and Clinical Health (HITECH) Act mandates stricter penalties, with a maximum civil monetary penalty of up to $71,162 per violation, capped at $2.1 million in a calendar year for violations of the same requirement. That's a defintely expensive risk.

Ongoing scrutiny of physician self-referral laws (Stark Law) and anti-kickback statutes.

The federal government is not easing up on healthcare fraud and abuse; in fact, enforcement is accelerating. The Stark Law (Physician Self-Referral Law) and the Anti-Kickback Statute (AKS) are two of the most significant legal risks for a multi-state provider like Select Medical Holdings Corporation because they govern nearly every relationship with a referring physician.

The Department of Justice (DOJ) continues to use the False Claims Act (FCA) to pursue these violations. For context, the Centers for Medicare & Medicaid Services (CMS) reported a record-breaking 314 Stark Law settlements under the self-referral disclosure protocol (SRDP) in 2024, totaling over $24.7 million. To give you a sense of the exposure, a peer health system, ChristianaCare, agreed to pay $42.5 million in January 2024 to resolve Stark Law and AKS allegations. This is why Select Medical Holdings Corporation must maintain an iron-clad compliance program; one misstep in a compensation agreement can trigger a massive FCA case.

The company must continuously adapt to updates in the Medicare prospective payment system for its hospitals.

Medicare reimbursement rules are the lifeblood of the Critical Illness Recovery Hospitals and Inpatient Rehabilitation Facilities (IRFs) segments, and they change every fiscal year (FY). The Centers for Medicare & Medicaid Services (CMS) finalized significant updates for FY 2025, which began on October 1, 2024, forcing immediate operational adjustments.

Here's the quick math on the major changes for Select Medical Holdings Corporation's core business units:

The 3.0% rate increase for both segments is a positive tailwind, but the 29% jump in the LTCH outlier threshold means more cases will fall outside of outlier payments, shifting the financial risk back to the hospital. You have to adapt your case mix management immediately.

State-level facility licensure and certificate of need (CON) regulations govern expansion efforts.

Select Medical Holdings Corporation's strategy relies on expanding its Rehabilitation Hospital segment, which had a significant revenue increase in the first half of 2025. This growth is shackled by Certificate of Need (CON) laws in the 36 states where they operate hospitals, plus others where they want to expand. CON laws require state approval for new facilities, services, or large capital expenditures, creating a non-market barrier to entry.

For example, in Michigan, the CON capital expenditure threshold for clinical service areas effective January 1, 2025, is $4,175,000. Any project over this amount triggers a lengthy, costly regulatory review process that can be challenged by competitors. This is a massive legal and political hurdle that slows down capital deployment and growth.

Legal costs are a non-negotiable part of doing business.

In a highly regulated industry like post-acute care, legal and compliance costs are simply baked into the operating model. The sheer volume of transactions, regulatory filings, and patient data across 105 critical illness recovery hospitals, 36 rehabilitation hospitals, and 1,922 outpatient clinics necessitates a massive legal infrastructure.

What this estimate hides is the cost of managing unexpected crises, like the June 2025 class-action investigations stemming from the vendor data breach. That single event will drive millions in unbudgeted legal fees, forensic costs, and credit monitoring services. Even the routine administrative overhead is substantial; for the first quarter ended March 31, 2025, General and Administrative expenses included $3.7 million in support services fees related to the Concentra spinoff alone. You must budget for the worst-case scenario because, in healthcare, the legal risks are always high-stakes.

Next Step: Compliance Officer: Draft a 12-month action plan to audit all third-party vendor Business Associate Agreements (BAAs) and security protocols by the end of the quarter.

Select Medical Holdings Corporation (SEM) - PESTLE Analysis: Environmental factors

A formal Environmental Policy commits to meeting or exceeding all applicable environmental standards.

Select Medical Holdings Corporation (SEM) has a clear, formal Environmental Policy, updated as recently as January 2024, which commits the company to responsible resource use and environmental preservation. This policy is a foundational statement, but its impact is currently hard to quantify for investors because the company does not publicly report on its environmental performance metrics.

The core of the environmental management strategy is a commitment to meeting or exceeding all applicable legal and regulatory standards. However, the true risk here isn't non-compliance, but the lack of transparency in a market that increasingly demands Environmental, Social, and Governance (ESG) disclosures. The absence of specific, reported Scope 1 and Scope 2 greenhouse gas (GHG) emissions data leaves analysts to model the environmental footprint based on the company's physical scale.

To put the scale in perspective, as of September 30, 2025, the company operates a substantial network, including 105 critical illness recovery hospitals and 36 rehabilitation hospitals across 40 states. That's a significant physical footprint with inherent energy and waste generation. We need to see the numbers to judge the policy's effectiveness.

Focus areas include reducing, reusing, and recycling materials to minimize environmental impact.

The company's strategy explicitly targets reduction, reuse, and recycling, particularly through partnerships with waste management vendors. These partnerships focus on practical steps like reducing waste pickup frequencies, implementing reusable sharps container programs, and recycling materials to divert waste from landfills. This is a smart operational approach, but it remains an internal effort.

For a company projecting a 2025 annual revenue between $5.3 billion and $5.5 billion, the potential for cost-saving from a truly optimized waste and recycling program is substantial. The primary environmental impact for a healthcare provider like Select Medical Holdings Corporation is typically in waste disposal and energy consumption, and the lack of public data on waste diversion rates or total medical waste generated is a blind spot for external stakeholders.

Here's a quick look at the gap between policy and public disclosure:

The Board of Directors oversees climate-related risks and opportunities in business decisions.

Governance is defintely in place. The Board of Directors, both directly and through its Nominating, Governance and Sustainability Committee, oversees the company's climate-related risks and opportunities. This oversight was formalized in the Committee's Amended and Restated Charter, effective February 12, 2025, which mandates the review of activities, policies, and programs related to environmental, climate, and sustainability matters.

This is a positive signal that climate risk is being considered at the highest level. The Board is tasked with ensuring that environmental impacts and climate change risks are factored into business decisions, which is critical for long-term capital planning. For instance, the company already reinforces the building envelope (windows, doors, roofing) and adds generator capacity to facilities in storm-prone areas to mitigate physical climate risk, which is a direct capital investment against environmental threats.

Efforts are underway to reduce energy use, emissions, and water consumption across facilities.

The operational efforts are focused on capital projects to improve aging infrastructure and boost efficiency. These include replacing older HVAC systems, installing energy-efficient LED lighting, and utilizing smart building technology. While these are standard, effective strategies for a multi-facility operator, the lack of a baseline metric is a concern.

Without a public target, like a commitment to reduce energy intensity (e.g., kWh per square foot) by a specific percentage, investors cannot track progress. This is a major difference from peers who use such metrics to signal operational excellence. The company's 2025 Adjusted EBITDA outlook is strong, in the range of $510.0 million to $530.0 million, but a quantifiable energy efficiency program could add millions to that figure through lower utility costs.

Sustainability is moving from a policy to a cost-management priority.

The shift is evident in the types of projects Select Medical Holdings Corporation highlights-improving aging infrastructure, replacing HVAC, and using LED lighting. These are less about altruism and more about reducing utility expenses, which directly impacts the bottom line. In a high-inflation environment, where operating costs are rising, energy efficiency is a direct lever for margin protection. The company's focus on environmentally preferred sourcing through its group purchasing organization also suggests a move to manage supply chain costs and risks.

The next step for the company is to translate these internal operational savings into external, reportable metrics. Until then, the market can only estimate the cost-saving benefit, which is a disservice to the company's efforts and its valuation.

Next Step: Strategy Team: Model the impact of a 5% reduction in Medicare Critical Illness Recovery Hospital reimbursement rates (LTAC) by December 15, accounting for the Q3 2025 rule delay benefit to quantify the true regulatory exposure.