Lake Forest-based Apria Healthcare Group Inc. is consolidating several billing and collection offices across the country into a central hub in a Kansas City suburb.
The provider of healthcare services to people in their homes plans to shift jobs from smaller facilities in Connecticut, Florida, Hawaii, Illinois, Ohio, Oregon and Washington state that are set to close by early 2010, company spokeswoman Lisa Getson said.
None of the impacted jobs are in Orange County.
Apria is set to employ 450 to 550 workers at a new billing center in Overland Park, Kan. It expects to be up and running there by Aug. 1.
The move is part of a larger consolidation of Apria’s billing operations. The company is combining billing into three centers nationwide, with other sites in Tempe and Jackson, Tenn.
Apria provides breathing, drug and other treatments to patients in their homes. It has 11,000 workers across the country and 2008 sales of $2.1 billion.
The consolidation, announced earlier this year, is the first visible move to cut costs since Apria was bought and taken private in October in a $1.7 billion buyout by New York-based Blackstone Group LP.
But the motive for the consolidation is a long-running one for Apria: falling government reimbursement for its services.
Apria and its competitors are dealing with a 27% payment cut for home breathing treatments and a 9.5% cut for medical equipment provided to patients on Medicare, the government’s health plan for the elderly and disabled.
About a quarter of Apria’s revenue comes from Medicare.
“Unfortunately, Medicare cuts are translating directly into staff reductions in these states,” Getson told HomeCare, a trade publication that’s part of Penton Media Inc.
Last year, Apria lost $115 million in reimbursement, according to Larry Mastrovich, the company’s president and chief operating officer.
Apria is giving workers at centers that are closing a minimum of two months notice, severance pay, performance and retention pay for those staying on, career counseling as well as the chance to move to another Apria location, Getson said.
Those who work in Overland Park on average will make $30,000 to $36,000 a year.
Apria already had a “significant presence” in the Kansas City area with a billing center, branch and pharmacies.
The company has some 250 workers in the area.
Apria’s Coram unit, which it bought for $350 million in 2007, runs a large home infusion pharmacy in the area that serves Kansas and west Missouri.
The Overland Park building has 101,000 square feet of space and is part of a campus that’s also home to Sprint Nextel Corp.
Apria signed a seven-year sublease for space in one of Sprint Nextel’s buildings, according to the Kansas City Star newspaper.
Apria came about from the 1995 combination of Fountain Valley-based Homedco Group Inc. and Abbey Healthcare Group Inc. of Costa Mesa.
The company worked past some early difficulties, including problems combining billing systems, to become one of the largest providers of home healthcare.
Apria will be joining another healthcare service company with an OC tie in Overland Park.
Four years ago, Prescription Solutions, an Irvine-based business unit of Minnesota-based UnitedHealth Group Inc., opened a Medicare drug distribution center in Overland Park back when it was part of PacifiCare Health Systems Inc.
Prescription Solutions manages drug benefits for UnitedHealth’s commercial and Medicare members, along with other customers.
