Looks like Lake Forest-based Apria Healthcare Group Inc. dodged a bullet.
The home healthcare provider’s seeing a comeback on Wall Street after thwarting possible Medicare payment cuts last month.
Shares of Apria are about even for the year, though they’re up about 16% since October and 42% since July. Apria counted a recent market value of $1 billion.
Behind the comeback: an unexpected rise in federal payments for oxygen and other equipment and better than expected third-quarter earnings.
In November, the Centers for Medicare and Medicaid Services said payments that Apria and others would receive for equipment will slightly rise in 2007. Apria and a key competitor had been bracing for Medicare payment cuts.
The Centers also said it would keep the three-year rental cap on breathing gear before a patient can own it.
Back in September, Apria’s shares slumped 10% on news that the Office of Inspector General of the Department of Health and Human Services was urging that payments for breathing gear be limited to as few as 13 months, instead of three years.
Delivering oxygen to patients with breathing trouble made up 68% of Apria’s third-quarter revenue. Overal sales were up 4% to $382.2 million from a year ago. Profit came in flat at $19.3 million.
About a third of the company’s revenue comes from Medicare patients, with private insurers making up the rest.
For more on this story, see the Dec. 4 edition of the Business Journal.
