Apria withdraws from giant managed care contract

Sunday, February 22, 2004

February 23, 2004

COSTA MESA, Calif. - Apria said good-bye to millions of dollars in business in January when it decided to no longer participate in the Gentiva CareCentrix managed care network.

The move could potentially open up new business opportunities for independent providers as CareCentrix looks for providers to replace Apria.

Prior to announcing its split with Gentiva, Apria adjusted its 2004 earnings and revenue to reflect reductions in Medicare reimbursement. Add to that its withdrawal from the CareCentrix network, and Apria now estimates revenue will grow by 5% to 7% in 2004, a sharp drop off from 2003’s 10% growth. Despite that anticipated reduction, the company still expects earnings to grow 7% to 9%, which is consistent with recent estimates.

Apria and Gentiva, the nation’s largest home health nursing company, had operated under an interim agreement since Dec. 31, 2003. Gentiva’s CareCentrix network includes about 1,900 providers who deliver a full range of homecare services - DME, IV, O&P, respiratory therapy and nursing services - to 15+ managed care companies.

As part of the contract withdrawal, Apria will work closely with Gentiva to ensure continuity of care for existing patients. It also will accept new patients for an interim period to facilitate the transition, Apria President Larry Higby stated in a release.