Strategy

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Thursday, January 31, 2002

KING OF PRUSSIA, Pa. - Home Health Corporation of America (HHCA) emerged from bankruptcy last month a leaner, more focused company that no longer supplies home medical equipment.

"We're no longer a one-stop-shop," CEO David Geller told HME News. "We either sold, closed or divested ourselves of everything that was not home nursing. Like many out there in the industry, we had issues making the one-stop-shop work, and in order to survive, we went back to nursing only."

HHCA exited Chapter 11 as a $40- million company, a far cry from the days when its revenues soared to $200 million. But while revenues soared, profits plummeted, due to lousy managed care contracts, BBA '97, problems with integration and loads of bank debt. The company now focuses exclusively on adult and pediatric nursing and is "leaving the HME to others," Geller said.

Apria Healthcare paid $20.8 million for HHCA's HME/RT arm in November 2001.

HHCA emerges from bankruptcy not only with a focus on home nursing but also on Medicare and Medicaid. It's had enough of managed care.

"Medicare is a lot of things, but one thing they are, at this time, is a prompt payer, if you fill out the forms right," Geller said. "If you follow the rules, they will send you the money. With a managed care organization, you can do every thing right and they'll still say, 'We don't feel like paying you."'

HHCA operates 13 branches in Pennsylvania, Delaware, Maryland and Florida. The company is going forward with a $4 million asset-based revolving credit facility from the Healthcare Business Credit Corp. HME

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