Lake Forest-based home healthcare provider Apria Healthcare Group Inc. cut 74 workers in Sacramento as part of a billing center consolidation.
Apria made the job cuts because it’s moving billing work previously done in Sacramento to its offices in Phoenix, company spokeswoman Lisa Getson said.
The cuts were part of a previously detailed consolidation that reduced Apria’s billing centers from 45 to 23 within the past two years, according to Getson.
The company looked at lease expirations and other real estate issues in figuring out which centers to close, she said.
“Sacramento into Phoenix is the last major consolidation,” Getson said.
Combining billing into fewer offices is part of an attempt to cut costs at Apria, which provides breathing treatments, drugs and medical equipment to patients in their homes.
Medicare Cuts
The news comes at a time when Apria and its rivals have had to work with cuts in Medicare reimbursement on breathing drugs and equipment.
Those cuts drove the home healthcare provider’s fourth-quarter profit down 28% from a year earlier.
Apria earned $19.5 million in the fourth quarter on sales of $359.7 million, which were off 4.4%.
Chief Executive Lawrence Higby said that he and other company executives wouldn’t see salary increases or bonuses this year because of the company’s performance.
For this year, Apria has said it expects to earn $88.2 million to $90.2 million, up from $67 million in 2005. The company hasn’t given a revenue target but said it expects sales to be up about 5% this year.
Analysts expect Apria to post revenue of $1.52 billion.
Apria and its competitors could face more Medicare-related challenges because President Bush has called for slowing Medicare spending growth in his proposed budget for the 2007 fiscal year.
Fighting Administration
Meanwhile, Higby, a well-connected Republican political figure, and some of his competitors in the home healthcare field are criticizing a proposal being floated by the Bush administration that would require Medicare beneficiaries to take title to their oxygen equipment after just over a year (see related item, page 23).
Apria still has a large operation in Sacramento. The company employs more than 200 workers in the area, Getson said, and is looking to expand in the city.
Some of the culled Sacramento workers moved to Phoenix or took other jobs within Apria, including in customer service and distribution.
