Lincare builds bid presence
CLEARWATER, Fla. – Lincare expects to be able to provide home oxygen therapy in seven of the nine competitive bidding areas very soon, the provider announced in its earnings report for the second quarter of 2011.
In the July 18 report, CEO John Byrnes states: “We have completed acquisitions of companies that are contracted to provide home oxygen services in seven of the nine competitive bidding markets and positive airway pressure therapy in eight of nine markets. We are awaiting final approval by CMS of the assignment of those contracts.”
Currently, Lincare has contracts to provide oxygen in two of the nine competitive bidding areas: Charlotte and Miami.
This is somewhat of an about-face for Lincare. In its earnings report for the second quarter of 2010, the provider criticized the pricing mechanism used by CMS to determine the rates for the program (its bids in Charlotte and Miami were 19% and 16% higher than the established rates) and stated it had no plans to “acquire contracts” from winning bidders in the other seven areas.
In its most recent report, Lincare also highlights the acquisition of a specialty pharmacy in February (“we are pleased with the integration of that acquisition”) and the progress of an anti-coagulation testing business (“we now have approximately 10,000 customers using this service”).
“We made steady progress in the first half of 2011 in executing certain new strategic initiatives that will provide future expansion for our business,” Byrnes stated.
Lincare’s net revenues for the second quarter were $449 million, a 7.3% increase compared to the same period in 2010. Net income was $42.8 million, a 7.9% decrease.
Of its earnings, Lincare stated: “The company estimates that the increase in net revenues was comprised of approximately 12.3% internal and acquisition growth offset by approximately 5% negative impact from $21 million of Medicare payment changes during the second quarter of 2011. The Medicare payment changes impacting the quarter include reductions in average payment rates for respiratory medications, the impact of new Medicare payment rates in the nine markets affected by the competitive bidding program, and the ongoing effect of Medicare oxygen customers reaching the 36-month rental payment cap.”
Lincare's net revenues for the first six months of the year were $880.6 million, a 6.2% increase compared to the same period last year. Net income was $89.1 million, a 1% decrease.