In brief: Drive explains sale, ResMed and F&P trade lawsuits

Friday, August 19, 2016

PORT WASHINGTON, N.Y. – Drive Medical has sent a letter to its customers in response to reports that private equity firm Clayton, Dubilier & Rice is close to buying the company.

Drive Medical, which currently calls private equity firm Ferrer, Freeman & Co. a minority stockholder, seeks additional equity capital to continue its growth strategy, the Aug. 12 letter states.

“Given the company’s position within the healthcare industry, its prospects, multiple channels of growth and acquisition strategy, the management team has decided to pursue a partnership with a larger private equity firm to replace Ferrer Freeman,” the letter states.

New York-based CD&R is in talks to buy Drive Medical for $750 million, Reuters reported on Aug. 10. As part of the deal, top execs at Drive Medical would join CD&R as minority investors, according to the news agency.

In its letter, Drive Medical says the change in ownership will have no effect on customers, its associates or the business in general, “except to make the company stronger for the future.”

“The entire management team will continue to lead the organization and provide value to our customers,” it states. “It is business as usual.”

F&P sues ResMed…

AUCKLAND, New Zealand – Fisher & Paykel Healthcare has filed patent infringement proceedings against ResMed in the U.S. District Court for the Central District of California. F&P seeks judgment that ResMed’s AirSense 10 and AirCurve10 range of flow generator products, its ClimateLineAir heated air tubing and its Swift LT and FX masks infringe patents that it holds. “Fisher & Paykel Healthcare has invested substantial resources in the research and development of its technologies over the past 45 years,” said Lewis Gradon, managing director and CEO. “The company has protected that investment through the development of a significant portfolio of more than 1,400 issued and pending patents, and takes infringement of its intellectual property rights very seriously.” F&P seeks all available remedies, including damages and injunctive relief. ResMed has also been embroiled in patent infringement proceedings with 3B Medical and BMC Medical.

…ResMed fires back

SAN DIEGO – ResMed has filed patent infringement actions against Fisher & Paykel Healthcare in U.S., German and New Zealand courts, as well as the U.S. International Trade Commission. ResMed seeks an injunction banning import of Fisher & Paykel’s Simplus full face mask, Eson nasal mask and Eson 2 nasal mask, asserting they infringe on ResMed's patents relating to modular mask systems, headgear design and cushion design. Earlier this week, Fisher & Paykel Healthcare filed patent infringement proceedings against ResMed, seeking judgment that ResMed’s AirSense 10 and AirCurve10 range of flow generator products, its ClimateLineAir heated air tubing and its Swift LT and FX masks infringe patents that it holds. ResMed has also asked the U.S. District Court for the Southern District of California in San Diegoto declare that it does not infringe those patents.

Inc. list recognizes HME

NEW YORK – The HME industry continues to make its mark on Inc. Magazines 35th annual 5000 list of fastest growing privately held companies in the country.

At No. 3395, Cape Medical Supply in Sandwich, Mass. has been named to the Inc. 5000 list for the seventh year.

“Making this list once is an honor, but making it seven times is incredible,” said Gary Sheehan, president and CEO, in a release. “It is a true team effort proving that our strategy is solid, and that our team’s incredible execution is winning us market share and fueling sustainable growth.”

Over the last three years, Cape Medical Supply has scaled its sleep therapy business, expanding its reach in Maine, Rhode Island, New Hampshire and Central Massachusetts. The result: 96% revenue growth.

This year also marks Carolina’s Home Medical Equipment’s 5th time on the list. The Matthews, N.C.-based company, at No. 4454, successfully took on more than 10,000 new orders last year and has more than doubled its staff over the past five years.

Inc. also ranked Ashville, N.C.-based Aeroflow Healthcare for the second year in a row. Coming in at No. 3100, Aeroflow Healthcare is on track to have a record year in sales and has added 40 jobs so far this year. In 2015, Aeroflow reported revenues of $51 million.

Home Oxygen Company, a respiratory services provider in Modesto, Calif., took No. 3343.

“Since our doors opened, we have enjoyed double-digit growth year-over-year with high patient satisfaction levels,” said Andrea Ewert, CEO, in a release.

Rotech notified of security breach…

ORLANDO, Fla. – Rotech Healthcare may have experienced a security breach that could potentially affect the personal health information of 957 individuals. The provider received a police report on June 13 that paper patient records had been recovered from an unauthorized individual, according to news reports. The records include names, Social Security numbers, patient numbers, addresses and more. Rotech says it did not receive copies of the stolen information until July 11, when the U.S. Secret Service provided it to them, according to reports. Rotech says it is reviewing its current policies and procedures to make sure a similar incident doesn’t happen again.

…hears back from GAO about VA contract

ORLANDO, Fla. – The Government Accountability Office has backed Rotech Healthcare in its dispute with the Veterans Affairs over a contract for DME that it awarded to Lincare. The GAO issued a decision on Aug. 17 sustaining Rotech’s bid protest. Rotech has argued the VA “improperly evaluated proposals, made an improper source selection decision and held unequal discussions” as part of the bid process. The GAO recommends that the VA request revised price proposals from Rotech and Lincare, reevaluate and document the evaluation of Lincare’s past performance proposal, and make a new source selection decision consistent with this decision. It also recommends the VA reimburse Rotech for the costs of filing and pursuing its protest.

Domtar acquires HDIS

FORT MILL, S.C. – Domtar Corporation has agreed to acquire direct-to-consumer supplier Home Delivery Incontinent Supplies, it announced Aug. 18. The deal, expected to close by the end of the year, is worth $45 million with a possible earn-out payment of up to $10 million. The Olivette, Mo.-based HDIS was founded in 1986. It has 240 employees and total revenues of approximately $65 million. Domtar is a provider of fiber-based products, including communication, specialty and packaging papers, market pulp and absorbent hygiene products. Its annual sales are approximately $5.3 billion. “Direct-to-consumer engagement and interaction is growing, and provides unique consumer and customer insights that are critical to continuously improve the value of our offering,” said Michael Fagan, president, Domtar Personal Care division. 

Linde, Praxair explore megamerger

CLEARWATER, Fla. – Linde, which owns Lincare and as of late last year American HomePatient, is in talks for a megamerger with Praxair, according to Bloomberg. The all-stock deal, which could be valued at more than $30 billion, may be reached as early as the coming weeks, the news agency reported Aug. 15. Linde and Praxair confirmed news reports but said in separate statements that preliminary discussions may not lead to a transaction, according to Bloomberg. Praxair sold its U.S. homecare business to Apria Healthcare in 2011.

ResMed launches myAir app

SAN DIEGO – iPhone users can now download ResMed’s myAir, a program for CPAP users to track their own sleep apnea treatment, from the Apple App Store. “We have seen increased rates of patient engagement and satisfaction by integrating myAir into their treatment plans,” said Raj Sodhi, ResMed president of Healthcare Informatics. “Now it’s even easier for patients to engage with their therapy thanks to the added convenience of an iPhone app.” Approximately 900 patients a day sign up for the web version of the program, which shows how long users slept on CPAP, how many apneas they had per hour and how well their CPAP mask fits. myAir also provides personalized tips for greater comfort and sleep, and awards badges when users reach milestones in their therapy.

Alpha Respiratory, Lincare hit with overtime lawsuit

RIVERSIDE, Calif. – Non-exempt hourly employees working in California for Alpha Respiratory and Lincare can proceed with their lawsuit as a class action, according to an Aug. 10 ruling by the U.S. District Court for the Eastern District of California. Honorable Judge Morrison England has ruled that non-exempt employees who worked for these companies in California since Oct. 21, 2010, can now seek back overtime wages and premiums for missed meal breaks. The lawsuit, originally filed by Riverside Labor Law Lawyers at Blumenthal, Nordrehaug & Bhowmik in October 2014, alleges that the companies failed to pay their hourly employees in California overtime wages, failed to provide the legally mandated meal and rest breaks, and failed to provide accurate wage statements required by state law. In the coming months, all individuals who are part of the class action will be notified of their rights.

AvaCare announces veteran initiative

LAKEWOOD, N.J. – AvaCare Medical, an online medical supply store, has launched its AvaCare Medical Veterans Initiative. The program offers veterans a 10% discount on any purchase from AvaCare Medical. The program also encourages veterans to share their stories to enter a tri-annual drawing for a $250 gift card. "There are veterans who need medical supplies, and since we're in that industry, we wanted to utilize this opportunity to help the people who helped us," said CEO Steven Zeldes, in a release.

Report: Untreated sleep apnea costs billions

DARIEN, Ill. – Undiagnosed obstructive sleep apnea costs nearly $150 billion annually in the United States, according a new report commissioned by the American Academy of Sleep Medicine. The estimated costs include $86.9 billion in lost productivity, $26.2 billion in motor vehicle accidents and $6.5 billion in workplace accidents, said Frost & Sullivan, which prepared the report. Undiagnosed OSA also costs $30 billion annually in increased healthcare utilization and medication costs related to co-morbidities like hypertension and diabetes, Frost & Sullivan estimates. OSA affects 29.4 million or 12% of the adult population. Diagnosis and treatment would result in $100 billion in savings, according to the report.

Philips Respironics becomes exclusive provider

MURRYSVILLE, Pa. – Philips Respironics has snagged a contract with Persante Health Care to be its exclusive provider of full PSG and portable home sleep test diagnostic equipment. Per the three-year contract, Persante, a sleep management company for hospitals, physicians and patients, will purchase Philips Respironics’ Alice 6 LDxS Sleep System and its Sleepwareä G3 software. “Through this agreement with Persante, we’re able to deliver effective diagnostic solutions that can provide insight into the causes of disrupted sleep and guide therapy for patients,” said Mark D’Angelo, sleep business leader at Philips Respironics.

Dexcom launches employee foundation

SAN DIEGO – Medical device maker Dexcom has launched the “Dexcom One Step Ahead Foundation: A Dexcom Employees Foundation,” a non-profit organization that will award grants to diabetes advocacy organizations. “It is empowering to be part of an organization where employees are emotionally charged by the work they do day to day and who want to give more of themselves to help others,” said Claudia Graham, senior vice president of global access at Dexcom and chairwoman of the newly formed foundation, who has Type 1 diabetes. Grants will range from $10,000 to $50,000. Money for the grants will be raised through employee contributions and fundraising efforts. Dexcom makes continuous glucose monitoring tools.

Stratice Healthcare, CMB Solutions collaborate

CARMEL, Ind. – Stratice Healthcare has announced that CMB Solutions is integrating its eDMEplus e-ordering application. “CMB Solutions is more than pleased to integrate the eDMEplus application, providing our national footprint of customers a more direct electronic connection to their referring physicians,” said Asif Kidwai, CEO, in a press release. Stratice Healthcare, a healthcare IT company that provides electronic ordering technology solutions that connect HME providers with medical offices and hospitals systems, recently rolled out eDMEplus nationally to a “widespread base” of electronic health record systems. CMB Solutions, a provider of patient support and contact services to the HME industry, expects to complete the integration in late August.

Association news: AZMESA, WAMES

The Arizona Medical Equipment Suppliers Association will change its name to the Southwest Medical Equipment Suppliers Association on Sept. 1. Rose Schafhauser will remain executive director. AZMESA, which represents 44 companies, plans to seek new members from across the Southwest as SMESA, says Schafhauser. “We are seeing more and more interest and recognition here in the Southwest from providers who are still telling us they did not know we were here,” she said. AZMESA formed in 2001… Ann Barrett will retire as executive director of the Wisconsin Association of Medical Equipment Services at the end of September. Barrett has been with WAMES for nearly 25 years, said President Rick Adamich. “WAMES’s strength as a state association is largely attributed to Ann’s leadership over the years,” he said. “We wish her the best.” Rose Schafhauser will take over the reins as executive director.

Short takes: AAHomecare, R82

AAHomecare is now accepting nominations for its 2016 Homecare Champion Award. Who fits the bill? An AAHomecare member who has a longstanding record of service within the homecare community, and who embodies the spirit of caring and generosity that are the hallmarks of the profession, the association says. The recipient of the award will be honored at the Stand Up for Homecare reception at Medtrade on Nov. 2. Send nominations to Sue Mariena at through Sept. 9…R82, which has combined brands with Convaid, has discontinued the Buffalo standing product. The companies encourage providers to check out the remaining portfolio of standing products, including the Caribou, Rabbit, Toucan and Gazelle PS.