Home Health & Hospice Week

American HomePatient Inc. and its stockholders may be happy with a recent plan to emerge from bankruptcy, but its secured lenders aren't so sanguine about the deal. AHP will pay off its lenders while stockholders retain equity in the company, according to a bankruptcy plan approved by federal court May 15. The plan, which will allow Brentwood, TN-based AHP to come out of Chapter 11 bankruptcy, calls for the company to continue its business operations uninterrupted under its current management team, AHP says in a release. The durable medical equipment, respiratory and infusion company and its subsidiaries filed for reorganization bankruptcy last July. The plan was hotly contested in April hearings by secured lenders, who protested their treatment under it, notes The Tennessean. The U.S. Bankruptcy Court for the Middle District of Tennessee approved the plan, but the secured lenders still may appeal it, points out AHP, which has 287 locations in 35 states. And AHP reported promising earnings for the quarter ended March 31. The company saw net income of $4.3 million on revenues of $82.5 million, compared to a loss of $66.9 million on revenues of $79.8 million for the same quarter in 2002. The year-ago loss was mostly due to a change in accounting rules, the company notes. The Centers for Medicare & Medicaid Services wants to add 19 more diagnosis-related groups to the list of DRGs that translate to less payment for hospitals when they discharge patients to home care and other postacute care services, CMS says in a May 19 Federal Register notice. The proposed DRGs range from 14 (Intercranial Hemorrhage and Stroke with Infarction) to 483 (Tracheo-stomy with Mechanical Ventilation 96 + Hours or Principal Diagnosis Except Face, Mouth, and Neck Diagnoses). A federal judge May 8 sentenced Bayer Corp. after the company pleaded guilty to a felony charge connected with a private labeling scheme. Judge Richard Stearns ordered the company to pay a $5.6 million criminal fine. The company also will pay about $250 million to settle related civil claims. The Department of Justice maintains that Bayer engaged in "private labeling" for Kaiser Permanente. Bayer gave Kaiser a low price and affixed slightly different labels to the products it sold the HMO - labels that allowed the drugmaker to avoid reporting the discounted Kaiser prices to the federal government. That enabled Bayer to evade paying some of its rebates to Medicaid, which are designed to ensure that the government receives the lowest drug price offered to other purchasers. Medicare managed care enrollees (32.4 percent) were more likely than fee-for-service Medicare beneficiaries (19.8 percent) to use hospice among people dying from cancer, says a study in the May 7 Journal of the American Medical [...]