Medicare reimbursement cuts ate into Apria Healthcare Group Inc.’s profits in the first quarter, the company said early Thursday.
The Lake Forest-based provider of home healthcare services said its net income in the period fell 9% to $25 million, versus a year earlier, on a 6% rise in revenue to $372 million.
Apria said Medicare reimbursement rate cuts that went into effect Jan. 1 hurt its results, as did its decision not to renew a contract with Gentiva CareCentrix Inc.
Revenue would have grown more than 10% without the effect of the two issues, Apria said in a release.
Apria provides breathing treatments, such as oxygen tanks, ventilators and drugs for use in patients’ homes. It also provides hospital beds and wheelchairs for home use. Much of its revenue comes from the government through Medicare paybacks.
The company has seen changes to the Medicare landscape as an opportunity to buy smaller homecare operators. During the first quarter, Apria bought seven companies for a total of $28 million.
Apria said it expects to post net income of $93 million to $95 million in 2005, in line with analysts’ estimates, according to Thomson Financial.
Shares of Apria were down 2.9% to $31.1 in trading Thursday.
