Longtime oxygen provider sells company to Lincare

Monday, March 26, 2012

Provider Mike Kuller wanted to make it work. The president and founder of Concord, Calif.-based Allstar Oxygen Services, diversified into retail (Allstar Medical Supplies). He developed strategic plans. Like so many other providers, he tightened his belt. Still, on March 1, he sold the 12-year-old oxygen business to Lincare (He still owns and operates the retail business). Kuller spoke with HME News about why he accepted its offer.

HME News: So you sold to one of the big guys.

Mike Kuller: Lincare will be keeping almost all of my employees here, that's really what I was concerned about. The managers that started the business with me are still here. This, I feel, is my last chance to salvage something out of this company that I've built and for the employees that have been so loyal to me.

HME: Why did you decide to sell?

Kuller: I feel like most of this industry is not going to survive if competitive bidding keeps moving forward as its structured. You just can't survive losing all of your Medicare business or keeping you Medicare business with a 30% reduction.

HME: How much Medicare business did you have?

Kuller: We have 60% exposure (to Medicare) and 600 oxygen patients.

HME: What were your plans for sticking with the oxygen business?

Kuller: The retail business (Allstar Medical Supplies) is a separate company. I could have offloaded my (Allstar Oxygen) salary to the retail business, and paid off our debt. We could have made it through competitive bidding, but it would have been a struggle month to month, assuming we would break even. We would have struggled with cash flow to pay our bills and make payroll. I don't think anybody is in business to do that.