Apria, Rotech report earnings
LAKE FOREST, Calif. – Apria Healthcare continues to see the biggest gains in its home infusion division.
The provider on Nov. 14 reported total net revenues of $608.5 million for the third quarter of 2012, compared to $584.9 million for the same quarter in 2011, an increase of 4%. Home infusion represented $309.6 million of those revenues, an increase of 6.2% for the quarter this year compared to last year.
"We are really focused on clinical and financial outcomes," said Chris Karkenny, executive vice president and CFO, during an earnings call. "It's a win-win."
By comparison, total net revenues for the home medical equipment and respiratory therapy division were $298.9 million for the third quarter of 2012, an increase of 1.9% compared to the same period in 2011.
"We were a little light in the summer months in terms of revenue growth (for HME/RT)," said Karkenny.
The two bright spots in HME/RT: the sleep and negative pressure wound therapy service lines, he said.
"Negative pressure is growing very fast for us," said Karkenny. "It's doing well and we're very excited."
Apria reported a net loss of $175.7 million for the third quarter, citing a trade name impairment of $280 million. Of that, $200 million relates to the HME/RT division and $80 million to the home infusion division.
"We believe in the future we will stop using the Apria trade name for the sale of enteral nutrition products," said Karkenny. "We'll position that business more in line with our infusion/Coram service line."
For the first nine months of the year, Apria reported just over $1.8 billion in total net revenues, an increase of 6.7% compared to the same period in 2011. Net revenues were $902.3 million for HME/RT and $909.6 million for home infusion.
Apria continues to work on process improvements, including implementing new document capabilities to enhance product and workflow, said Karkenny. The provider also plans to continue its focus on managed care contracting, which currently makes up about 71% of its business, and vendor procurement.
"Day in and day out, we are working to build a strong foundation," said Karkenny. "There's still more work to be done here."
Rotech: ‘Patient growth continues to be good’
ORLANDO, Fla. – Rotech Healthcare on Nov. 14 reported net revenues of $113.8 million for the third quarter this year compared to $122.4 million for the same period last year. Net loss was $12.8 million vs. $2 million.
Rotech reported net revenues of $347.3 million for the nine months ended Sept. 30, 2012, compared to $365.4 million for the same period last year. Net loss was $43.8 million vs. $7.7 million.
Organic patient growth and previously completed asset purchase transactions contributed about $2.7 million and $700,000, respectively, for the third quarter this year compared to the same period last year. That growth was offset by $12 million in losses from:
• Decreased neb med volume and reimbursement ($1.8 million)
• Decreased net revenue from higher rates of contractual/revenue adjustments ($3.2 million)
• Patients moved to non-billable status primarily as a result of Medicare claim denials from prepay and post-pay audits ($3.3 million)
• Decreased net revenue from oxygen patients reaching their 36-month capped rental ($3.5 million); and
• Decreased net revenue from non-core product lines ($.2 million).
President and CEO Philip Carter, who plans to retire Dec. 31, says things are looking up for Rotech.
"Patient growth for our key product lines continues to be good, and our efforts to reduce adjustments for contractuals and bad debt are beginning to have a positive impact," stated Carter in a press release. "Planning for 2013 is well underway to position the company for improved financial performance for the year ahead."
[See also: Rotech’s complete balance sheet]