In brief: Invacare improves adjusted EBITDA, Option Care Health sees ‘robust’ growth

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Friday, May 8, 2020

ELYRIA, Ohio – Invacare reported net sales of $218.4 million in the first quarter, a 2.2% decrease compared to the same period last year.

It reported $87 million in net sales for North America, specifically, about a 1% increase, driven by increased respiratory and mobility and seating product sales.

The company saw a 4% increase in mobility and seating product sales, driven by a 16% increase in power wheelchairs and offset by a decline in manual mobility product sales. 

Gross profit was $63 million for the first quarter this year vs. $61.5 million for the same period last year. Adjusted EBITDA was $5.9 million vs. $1.5 million. 

"We entered 2020 intending to build on our previous transformation progress and I am pleased to report good results in the quarter, demonstrated by strong financial performance across all business segments,” said Matthew Monaghan, chairman, president and CEO. “Our continued transformational initiatives drove measurable progress, including significantly improved profitability, as adjusted EBITDA more than tripled compared to the prior year. This was driven by expanded gross profit as we focused on a more profitable sales mix, improving material and freight costs, and reduced SG&A expenses driven by operational efficiencies.”

Option Care Health sees ‘robust’ growth

BANNOCKBURN, Ill. – Option Care Health reported net revenue of $705.4 million for the first quarter of 2020, an increase of 48% compared to the same quarter in 2019.

Gross profit was $158 million or 22.4% of net revenue, an increase of nearly 61% compared to one year ago, and net loss was $19.9 million or 11 cents per share. Adjusted EBITDA was $40.2 million.

“We are very pleased with the strong financial results generated in the first quarter, including robust revenue growth and solid cash flow generation,” said CEO John Rademacher. “More importantly, as the COVID-19 pandemic arose in the latter part of the first quarter, I could not be prouder of how the team of more than 5,000 professionals that comprises Option Care Heath continue to rise to the challenge to combat the coronavirus.”

In March, the provider created a command central to focus on a collaborative and coordinated response to, among other things, ensure the health and safety of employees and maintain continuity of care for patients.

Option Care Health in April received approximately $11.7 million from the Public Health and Social Services Emergency Fund. With the extent that those funds offset the negative impact of the COIVD-19 pandemic undetermined, the company is unable to maintain previously communicated guidance for 2020.

Viemed report increases in first quarter

LAFAYETTE, La. – Viemed Healthcare reported net revenue of $23.8 million for the first quarter of 2020 and net income of $4.2 million, an increase of 31% and 117%, respectively, compared to the first quarter of 2019.

The company saw its active vent count grow by 25%, compared to the same quarter one year ago.

“We believe the first four months of the year have demonstrated how important the Viemed mission is to the future of our country’s healthcare system,” said Casey Hoyt, CEO. “Our clinicians have come through to share their expertise with others to assist with COVID-19 solutions. In addition, we have established long-term relationships with hospitals and physicians that we expect will only be strengthened in the future as we continue to do our part in supplying ventilators and keeping hospital beds free for the patients who have become ill with the coronavirus.”

The company expects to generate net revenue of $42 million to $44 million during the second quarter of 2020, including approximately $20 million of sales related to the COVID-19 pandemic.

AAHomecare urges Medicaid to ensure access

WASHINGTON – AAHomecare is asking CMS to ensure state Medicaid program do not engage in cost-cutting measures that will access patient access to DME.

In a letter sent to the Deputy Administrator for Medicaid & CHIP Services, the association urges the agency to make sure that the financial pressures and health risks experienced by HME providers in ensuring patients have adequate access to medical services and items during the COVID-19 pandemic are taken into account in assessing any proposed rate cuts. AAHomecare also encourages the agency to issue a letter to state Medicaid directors affirming the continued applicability of medical access monitoring review plan requirements during the COVID-19 emergency.

Oklahoma Medicaid is planning to implement rate cuts July 1; Medi-Cal in California has recently implemented rate cuts and is looking to recoup money to new rates back to Jan. 1, 2019.

Register now for Heartland at Home

WATERLOO, Iowa – Registration is open for VGM”s virtual Heartland at Home Conference. The event takes place June 15 through July 10 and will feature five tracks covering billing and reimbursement, business operations and leadership, respiratory, rehab and accessibility. One day each week will feature a session from the five tracks. Speical sessions include a keynote address, “HME in the Post-Pandemic Era: Analysis & Commentary,” from Mark Higley, VGM’s vice president of regulatory affairs and Ronda Buhrmester, senior director of payer relations and reimbursement. “Although we needed to shift to a virtual learning experience, we’re excited that the same industry thought leaders we count on will still be sharing their expertise but from a safe distance,” said Jill Blaser, design and development manager with VGM Education and Heartland education chair. “We’re also happy to share that many of the sessions offer valuable contact hours or CEUs.” *Registration is free to VGM members. Stay up to date on all Heartland At Home developments by following VGM Heartland Conference on Facebook and vgmheartland.com/agenda

Tomorrow Health launches online medical equipment store

NEW YORK  – Tomorrow Health has launched a home-based care platform with more than 40,000 home medical products, including respiratory, mobility, wound care, urologicals and nutritional products, and two-day delivery. “At a time when keeping patients healthy at home has become mission-critical, we aim to serve as a partner and advocate for millions of Americans in need of home-based healthcare,” said Vijay Kedar, co-founder and CEO. The company works with Medicare and more than 100 private insurers. 

Medtronic offers pandemic assistance

DUBLIN – Medtronic has expanded its Medtronic Assurance program for U.S. customers who lose their jobs and health insurance due to COVID-19. Current eligible customers can receive a three-month supply of sensors, infusion sets and reservoirs at no cost. “Knowing that concerns around continuity of therapy are at the very top of mind for people living with diabetes, Medtronic wants to ensure during this stressful and challenging time that we can be there for our customers when they need it most,” said Sean Salmon, president of the Diabetes Group at Medtronic. The Medtronic Assurance program also has options that include flexible payment plans, payment deferrals for job loss or furlough and financial assistance for low-income families or those impacted by health care costs. To learn more: www.medtronicdiabetes.com/assurance or call 800-646-4633.

AdvaMed launches online platform

WASHINGTON – The Advanced Medical Technology Association (AdvaMed) has launched a new platform, www.ventconnect.org, to connect ventilator companies with component suppliers to help scale production and distribution. The platform was developed pro bono with the Aerospace Industries Association, Google and other partners. AdvaMed is a medical technology association representing more than 400 companies. “The medical technology industry is stepping up to meet the unprecedented demand from hospitals and patients across the country for ventilators,” said Scott Whitaker, AdvaMed president and CEO. “Our companies have added shifts, started new production lines, and hired new workers so that soon our capacity will be tenfold what it was before the pandemic. But to keep producing these life-saving devices, our member companies need a steady stream of key components from beyond the normal supply chain, and that’s where this new online platform developed with the AIA and Google will be of tremendous value.” 

NSC waives certain supplier standards

WASHINGTON – The National Suppliers Clearinghouse has waived supplier standards on location access and hours of operation, accruing to AAHomecare, which has been working with CMS on alleviating some standards during the COVID-19 pandemic. NSC has   waived: physical location access (standard No. 7), requirement for primary business telephone (standard No. 9), and minimum hours of operation (standard No. 30). In addition, revalidation visits have been suspended.

CareCentrix acquires Turn-Key Health

HARTFORD, Conn. – CareCentrix has acquired Turn-Key Health, a community-based palliative care company serving health plans, hospitals and physicians. Its proprietary Palliative Illness Management program (PIM) will be fully integrated into the CareCentrix platform. “Health plans and patients are looking for home-based palliative care that honors the hard choices that patients and families need to make as well as gives them the opportunity to remain at home,” said CareCentrix CEO John Driscoll. “The acquisition of Turn-Key is the next step in CareCentrix’s commitment to provide more home-based services for all patients as delivering care at home becomes the new norm.” CareCentrix has partnered with Turn-Key for the past year. PIM will allow CareCentrix to identify patients who could benefit from palliative care, by using data analytics and artificial intelligence.

NSM expands Colorado presence

NASHVILLE, Tenn. – National Seating & Mobility has acquired the complex rehab division of Hartman Medical Equipment in Grand Junction, Colo., increasing its service area in Colorado’s Western Slope. “NSM remains committed to offering mobility and accessibility services nationwide,” said Bill Mixon, NSM CEO. “We look forward to serving individuals in the Grand Junction area.” Hartman Brother, owned by Kirk and Jay Hartman, is a full-service DME provider with multiple locations. The rehab team from Hartman, led by ATP Brian Severson, will join NSM following the acquisition. 

Vertess makes new hire

FORT WORTH, Texas – Vertess has added Matt Moebius to its business development team. Moebius brings a long history of HME experience in all aspects of the business from sales and operations to logistics and business development. Despite the ongoing COVID-19 crisis, Vertess has seen continued M&A activity. “Although the M&A markets have been a bit choppy, we still see great prospects for 2020," noted Bradley Smith, VERTESS Managing Director/Partner. "We are excited to expand our team and, thereby, our reach to the healthcare community.” Vertess was recently ranked No. 5 on Axial’s Top 20 Lower Middle Market Investment Banks list.

Commercial payers update guidelines

WASHINGTON – AAHomecare has updated its Third-Party Payer and MCO Tracking resource to include recent updates from several payers. Aetna has updated its home oxygen policy guidelines to state that requirements for qualifying Pa02 laboratory test values for home oxygen will be waived for COVID-19 infected persons. Anthem has waived prior authorization requirements in 13 states for home respiratory equipment including oxygen supplies, CPAP and ventilators, along with the requirement for authorization to exceed quantity limits on gloves and masks. CareCentrix has updated its guidance on several requirements, including order delivery, quantity changes and face-toface requirements. AAHomecare reminds suppliers that the resource is for summary and comparison purposes only and says to check with payers to confirm this information.