Medicare’s a business worth staying in, even with recent government reimbursement cutbacks.
So says Lawrence Higby, chief executive of Lake Forest-based Apria Healthcare Group Inc.
“We still are bullish on Medicare,” Higby said.
The comments came after Apria last month reported that first-quarter operating profit fell 18% to $41 million, versus a year earlier, on a 6% rise in revenue to $372 million.
Apria blamed the mediocre results on cuts in Medicare reimbursement that went into effect Jan. 1, along with the non-renewal of a contract with Gentiva Health Services Inc., which provides home nursing care.
The company expects sales to grow 5% to 6% this year.
Apria provides breathing treatments, such as oxygen tanks, ventilators and drugs for use in patients’ homes. It also supplies hospital beds and wheelchairs for home use. Many of its customers are covered by Medicare.
Higby’s optimistic on a couple of fronts:
After industry lobbying, the government agreed to pay Apria and others a fee to give drugs covered under Medicare.
A proposed oxygen reimbursement cut, “at the strong urging of the industry,” was whittled down to about 8%. The cut initially was expected to be 15% to 20%.
For more on this story, see the May 9 issue of the Business Journal.
