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Home Health & Hospice Week

Industry Notes:

Lincare Locations Top 700 Mark

Published on Thu Oct 23, 2003

Respiratory giant's revenues jump 21 percent this quarter. 

A balanced approach including both internal and external growth is the key to Lincare's success in the growing oxygen market, execs say.

The strategy seems to be paying off, as Clearwater, FL-based Lincare Holdings Inc. beat analyst expectations and reported revenues of $244.2 million for the quarter ended Sept. 30 - that's a 21 percent increase over the same period in 2002. The respiratory giant's net income grew from $48.5 million a year ago to $60.4 million in the same time period.

Lincare CEO John Byrnes says the company will continue with its success striking the right balance between "growth from internal development and acquisitions of local and regional companies." The company attributes 11 percent of its revenue increase to internal growth and 10 percent to acquisition growth.

The company made three acquisitions with revenues of $2 million in the quarter. During the first nine months of 2003, Lincare purchased 11 companies with $80 million in revenues, it says. The addition of 15 new locations in the most recent quarter brings Lincare's total to 715, the company adds.

Lincare's stock hit a 52-week high Oct. 21, trading at $40.05 per share.

  • Once again, the Department of Health and Human Services has increased the Medicare premium, deductible and coinsurance amounts beneficiaries have to pay. Medicare beneficiaries will pay an $876 deductible for Part A services in 2004, up $36 from the $840 they pay now. The Part B monthly premium will jump 13.5 percent next year, from $58.70 to $66.60. Deductibles and premiums are updated each year according to a statutory formula.

  • Claims for extra therapeutic shoe inserts no longer will be able to slip through the cracks in the payment system. The Centers for Medicare & Medicaid Services has wised up to the fact that its claims processing system hasn't been editing for inserts represented by HCPCS codes A5509 and A5511, CMS says in an Oct. 17 one-time notification, Trans. No. 7.

    Starting in April 2004, carriers will add the codes to their diabetic shoe edits, which enforce the following limits: no more than one pair of custom-molded shoes (including inserts provided with such shoes) and two additional pairs of inserts; or no more than one pair of depth shoes and three pairs of inserts (not including the non-customized removable inserts provided with such shoes).

    CMS' Web page for one-time notifications, which are part of its new online manual system and have replaced program memoranda, is at www.cms.hhs.gov/manuals/120_OTN/default.asp (see Eli's HCW, Vol. XII, No. 33, p. 262).

  • If you're not sure whether a business arrangement you are mulling will be kosher in the HHS Office of Inspector General's eyes, you might want to obtain an advisory opinion from the agency. Now the OIG has demystified the process with a collection of frequently asked questions on the topic at http://oig.hhs.gov/fraud/advisoryopin-ions/aofaq.html. The FAQs cover appropriate topics for review, the cost of obtaining the opinion and how long you can expect the process to take, among other items.

  • The rate of publicly announced home health mergers and acquisitions fell off in the third quarter of 2003, reports New Canaan, CT-based M&A firm Irving Levin Associates. There were eight deals in the third quarter of 2002, but only four deals for the same quarter this year. However, the most recent quarter's M&A rate remained steady with the previous quarter, which also recorded four transactions, according to Irving Levin.

  • Hillenbrand Industries Inc. appears to be aiming its newly formed clinical division within health care subsidiary Hill-Rom Co. squarely at the lucrative home respiratory market. The Batesville, IN-based company has completed the acquisition of St. Paul, MN-based Advanced Respiratory Inc., a privately held manufacturer and distributor of noninvasive airway clearance products and systems.

    Hillenbrand paid $83 million in cash for the company, and could pay up to $20 million more if Advanced Respiratory hits certain revenue growth targets, it says.

  • National Home Health Care Corp. has announced an 18 percent jump in revenues and a 25 percent jump in net income in the quarter ended July 31, as compared to the year-ago quarter. The Scarsdale, NY-based home care and staffing provider recorded net income of $1.3 million on revenues of $24.5 million for the quarter.

    NHHC President and CEO Stephen Fialkow attributed the growth to expansion in the Northeast and successful integration of acquisitions over the past three years.

  • Shareholders and unsecured creditors are unlikely to recover any losses from the collapse of health care financier DVI Inc. The Jamison, PA-based company, which furnished financing to a number of home care companies, said in a Securities and Exchange Commission filing that an auction to sell off its assets didn't attract the bids it wanted, according to the Philadelphia Business Journal.

    DVI, which is in Chapter 11 bankruptcy, says it plans to work with its debtor-in-possession lenders "to maximize value through other means."

  • Three defendants in Phoenix, AZ have pled guilty to health care fraud and false claims for durable medical equipment, according to the U.S. Attorney's Office for the District of Arizona. Prosecutors charge that Ani Edem, Nsikan Edem

    and Mark Lewandowski created 30 sham DME companies and fraudulently billed Medicare for $25 million over a period of 3.5 years. The defendants improperly obtained the names and numbers of Medicare beneficiaries; billed Medicare for motorized wheelchairs, hospital beds and specialized mattresses, and enteral nutrition that was either not provided or not ordered by a physician; and created false medical records - including forged physician and patient signatures - in response to audit requests.

    The actions are the latest of 20 defendants' pleas in the investigation conducted by the HHS Office of Inspector General. The 20 defendants who have pled guilty include DME owners, marketers, billers and staffers, the U.S. Attorney's Office says.

  • A Pennsylvania DME company may be ruing the day it hired a competitor's ex-employee. The former employee is the one who turned in the owner and general manager of Jim Thorpe, PA-based Keystone Medical Equipment for allegedly stealing equipment from Apria branch offices in Pottsville and Tannersville, reports the Allentown, PA-based Morning Call.

    Christopher Plebani, who was employed by Wasserotts Medical Supply before Lake Forest, CA-based Apria Healthcare Group Inc. bought the company, went to work for Keystone. Plebani became suspicious when he observed Keystone general manager Eric Doyle, who was another Wasserotts ex-employee, allegedly scraping Apria stickers off of oxygen canisters and placing Keystone stickers over them, among other activities.

    When Plebani handed over a list of serial numbers to the authorities and Apria reps, Apria confirmed many of the items were stolen from it, the paper says. The state police raided the Keystone warehouse Sept. 23 and seized 66 pieces of equipment. The police say they are getting close to making arrests in the case.

    Doyle and Keystone owner John Joyce didn't comment for the newspaper story.

  • For the second time this month, a state has backed off of plans to cut its home care services after public outcry over the proposal. At least 500 people have called or written in the past few weeks to protest the $17 million cut to the Michigan Department of Community Health's Adult Home Help program (see Eli's HCW, Vol. XII, No. 36, p. 286).

    The Department is reevaluating the cut and looking for a "different solution," a Department spokesperson told the Detroit Free Press. A new plan is expected next month.

    New Hampshire earlier called off its plans to create a wait list for Medicaid home care services after vociferous protests (see Eli's HCW, Vol. XII, No. 35, p. 280).

  • Cambridge Home Health Care has been named to the Inc. 500 ranking of fastest-growing private companies, says the Akron, OH-based home health company with 19 locations. Inc. magazine annually ranks companies nationally based on their sales growth.

    Cambridge has recorded sales growth of 465 percent in the last five years, reaching $16.9 million in revenues in 2002, it says.

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