Shares of Lake Forest-based Apria Healthcare Group Inc. fell Monday as an analyst said that a proposed Medicare bill could hurt home healthcare providers.
Apria’s shares fell 5% Monday with a market value of $900 million. The shares rebounded 1% in afterhours trading.
In a client note, Matthew Ripperger of Citi Investment Research wrote that Congress is leaning toward a rate cut in monthly Medicare payments for oxygen services, which would negatively affect home medical equipment providers Apria and Lincare Holdings Inc., a Clearwater, Fla.-based competitor.
Congress is negotiating a Medicare bill that contains a 10% cut to Medicare payment rates for physician services, which includes sectors like home medical equipment providers.
Ripperger said that if the bill becomes law, it could affect Apria’s 2008 earnings by roughly $38.5 million, assuming cuts to certain oxygen services.
He also noted that Lincare, which provides oxygen and breathing treatments, could see a profit hit of $75.4 million in 2008 if the Medicare bill becomes law.
