Divide and conquer: PHM plans split

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Friday, October 7, 2016

LAFAYETTE, La. – After making a splash with the roll up of several HME companies, Patient Home Monitoring said in September it will split into two separate companies as part of a restructuring plan.

“(The restructuring) will provide each new company with the independence, focus, financial resources and flexibility they need to adapt quickly to market and customer dynamics,” said Michael Dalsin, outgoing chairman of PHM, in a press release.

Viemed, a respiratory provider specializing in non-invasive vents for patients with COPD, congestive heart failure and neuromuscular conditions, will retain 30% of current revenues; Apparo Home Care, a home medical equipment provider, will retain 70% of current revenues.

PHM has been busy rolling up several HME companies, including Maine-based Black Bear Medical, Kentucky-based Legacy Oxygen, and Georgia-based Care Medical Partners.

“With the continuing pressure on HME providers to integrate, it could be that they are restructuring so they can better take advantage of what they bought,” said Jonathan Sadock, managing partner/CEO of Paragon Ventures. 

PHM also acquired Sleep Management, the parent company of Viemed, in 2015. Viemed’s co-founder and co-CEO, Casey Hoyt, is currently CEO of PHM.

“They bought Viemed for bulk and scale and size,” said Don Davis, president of Duckridge Advisors. “It could be that the guys in charge of PHM are wondering why they are in the DME business.”

Additionally, it’s likely PHM has been hit hard by a 33% reimbursement cut for vents that went into effect in January. Sleep Management was one of Medicare’s top billers of E0464 in 2015, at $19.3 million, according to the HME Databank.

“I think this is an attempt to salvage anything out of the roll-up,” said Davis. “It was poorly planned and they over-valued the assets they were acquiring.”

Hoyt is expected to be CEO of Viemed, while Greg Crawford will be CEO of Apparo. The transaction is expected to close by the end of 2016.