Home Health & Hospice Week

Industry Notes:

Apria Posts Double-Digit Revenue Increase

An 11 percent increase to revenues and a 9 percent increase to net income were a few of the highlights from Apria Healthcare Group Inc.'s latest earnings report.

The Lake Forest, CA-based respiratory, infusion and home medical equipment company made a whopping 21 acquisitions for $88.6 million in the first three quarters of 2003. That compares to competitor Lincare Holdings Inc.'s 11 acquisitions during the same period (see Eli's HCW, Vol. XII, No. 38, p. 302).

Apria whittled its days' sales outstanding to 51 days at the end of the most recent quarter, Sept. 30. That's down from 52 days at June 30, the company says.

Apria recorded net income of $28.9 million for the quarter, up 9 percent from $26.5 million for the same period in 2002. Revenues increased 11 percent to $346.3 million for the quarter, compared to $312.0 million a year ago.

  • Two new OASIS tools are up on the Centers for Medicare & Medicaid Services' Web site. Home health agencies can download an OASIS followup assessment scheduling calendar for 2004 as well as a revised Appendix C for the OASIS manual. The revised chapter includes sample forms and a patient tracking sheet that incorporate changes from the OASIS data set that went into effect Oct. 1. They are available at www.cms.hhs. gov/oasis/hhnew.asp.

  • A common working file edit flagging too many immunosuppressive drug claims should soon get fixed by the durable medical equipment regional carriers.

    An edit designed to weed out duplicate immunosuppressive drug claims isn't working properly, CMS points out in Oct. 17 Transmittal No. 7. The problem: The edit sends out an alert whenever immunosuppressive drug claims are submitted along with other, non-immunosuppressive drug DME items on the same date of service by the same supplier. The agency mandates that the edit be fixed by April 1, 2004.

  • HHA regulation often follows in the footsteps of nursing homes - and that could include tougher surveys ahead as quality of care takes center stage. Sen. Charles Grassley (R-IA) recently held a series of oversight hearings that warn of increasing scrutiny for home care providers.

    Focusing on a July General Accounting Office report, Grassley said he would demand a "timeline" from CMS for taking GAO-recommended steps to strengthen oversight of the state survey process. But CMS administrator Tom Scully noted that CMS' funding for overseeing the survey process has been held flat for several years.

    Although the hearings focused on nursing home deficiencies, Grassley said he would ask the GAO "to look into the adequacy of federal funding for state survey and certification activities - not just for nursing homes but for other providers, such as home health care."

  • The home nursing market is attracting more outside interest. Tysons Corner, VA-based Telescience International Inc. plans to enter the home care market through "a series of planned acquisitions," says the company, which is a wholly owned subsidiary of publicly traded Medical Staffing Solutions Inc. Telescience currently is a provider of medical personnel to state and federal government agencies, it says.

  • Walgreens is beefing up its presence in the Lone Star state. Walgreens Home Care Inc. Oct. 1 acquired selected assets from Pinnacle Home Care, a home infusion business in San Antonio, Austin and Corpus Christi, TX, the Deerfield, IL-based drugstore chain subsidiary says.

    The acquisitions, which build on Walgreens' Houston location, initially will furnish only home infusion. But Walgreens plans to add home respiratory services and HME to their offerings, it says.

  • Rotech Healthcare Inc.'s numbers are down this quarter. The Orlando, FL-based respiratory and DME company reported net income of $2.8 million on revenues of $142.4 million for the quarter ended Sept. 30, compared to $4.4 million on $153.1 million for the same period of 2002.

    Rotech's mix of business has changed, with respiratory therapy equipment and services making up 83.9 percent of revenues this quarter versus 79.3 percent in the year-ago quarter. Straight DME revenues went from 18.4 percent to 14.8 percent of revenues in the same time period, the company says.

  • Matria's earnings look rosy this quarter, but don't expect it to last. Matria Healthcare Inc. reported net income of $2.4 million on revenues of $81.9 million for the quarter ended Sept. 30, compared to a loss of $1.2 million on revenues of $71.4 million for the same period of 2002.

    A 24 percent revenue increase for the department comprising disease management for diabetes, respiratory, cardio and other conditions made up for a 2 percent revenue decrease for the obstetrical and maternity DM department, the Marietta, GA-based DM company says.

    Because Matria will be adding staff in the fourth quarter to ramp up for new contracts starting in the new year, the company's costs will increase without corresponding revenue increases during the period, CEO Parker Petit warned.

  • Suppliers can expect demand for DME products aimed at obese patients to continue growing. A recent Rand Corp. study says one in 50 U.S. adults is considered obese, while the Centers for Disease Control and Prevention says 30 percent of U.S. adults in 2000 were obese, reports The Washington Times.

    The demand for bariatric products is increasing across all provider types, including home care, providers told the Times. Medline Industries Inc. says obesity-related products currently make up 5 percent of its sales, but the Mundelein, IL-based supplier expects that figure to jump to 10 percent as quickly as next year.

  • Louisiana's plan to comply with the U.S. Supreme Court's Olmstead decision isn't passing muster with the feds. Federal officials say the plan is too limited and shouldn't restrict access only to those coming out of a nursing home or in immediate need of nursing home care, reports the Associated Press.

    The state continues to negotiate with the feds over the plan, which is budgeted at $28 million (see Eli's HCW, Vol. XII, No. 34, p. 272). The state spends more than 90 percent of its long-term care budget on nursing home care, AP says.

  • Indiana's Medicaid reimbursement rates for home care are so low that home care providers are fleeing the program in droves. The number of providers willing to participate in the state's CHOICE and waiver programs has shrunk by 30 percent in one five-county area to 84 HHAs, reports the South Bend Tribune.

    A survey conducted by the Indiana Association for Home and Hospice Care found about one-fifth of responding providers throughout the state had dropped out of the waiver program, the Tribune says.