Regionals make 'bold' moves

Landauer, Allcare Medical merge; Norco buys two West Coast providers
Friday, June 21, 2013

Companies that plan to participate in competitive bidding have begun to consolidate in the lead up to July 1.

In May, Mt. Vernon, N.Y.-based Landauer Metropolitan merged with Plainview, N.Y.-based Allcare Medical to create one of the largest providers in the Northeast. The deal allows Landauer, which wasn’t offered any Round 2 contracts, to keep its considerable hand in the Medicare business. It currently serves 350,000 patients through 28 locations in nine states.

Allcare, with six locations in three states, accepted 63 contracts in eight product categories across nine competitive bidding areas.

“We are doing this not just to sustain current revenue levels and make up for the price cuts with cost cutting or layoffs,” said Win Hayes, CEO of Allcare, who will become 

Landauer’s president. “This is a platform that we believe we can use to handle rapid growth.”

Landauer plans to quickly integrate Allcare’s backbone systems for IT, financial, customer service and distribution. Landauer CEO Lou Rocco says efficiency remains a key strategy for survival under ongoing downward pressures and increased documentation and compliance requirements.

“There’s not going to be any lack of volume—the key is making sure you have auditable documentation on delivery,” he said. “That’s our key. We are also getting more aggressive in getting co-pays and deductibles.” 

Also in May, Boise, Idaho-based Norco announced it had made two acquisitions: Care Medical with six locations in the Portland and Seattle competitive bidding areas; and Walgreens Respiratory Services, with four locations in the Seattle and Vancouver region. Norco accepted contracts in those markets but hadn’t previously had a local presence.

“This is a bold acquisition for us and so we will be focusing on these markets at this point,” said Brent Seward, executive vice president. “I think both companies have some real similarities to Norco in terms of product mix and a philosophy of taking good care of patients.”

Norco will fold the businesses into the Norco name and plans to retain more than 200 employees. The deal brings Norco to a total of 91 locations and nearly 1,200 employees.