Apria Healthcare’s Shares Dip 16.5% on Move to Cut Medicare

Shares of Apria Healthcare Group Inc. and other home health providers fell Monday in the wake of reports that the Republican-controlled Senate Finance Committee is proposing to cut Medicare reimbursement rates by 40% for oxygen therapy used by patients. Apria’s stock tumbled 16.5% to close at $24 per share, down $4.75.

If the GOP plan survives, the impact will be “quite negative” for Apria next year, because oxygen therapy supplies 20% of its revenue, said Ann Logue, an analyst at Volpe, Welty & Co.

Lawrence Smallen, Apria’s chief financial officer, downplayed the proposal’s impact on the company. He said he believes the final reimbursement rate won’t be “anywhere near” the magnitude of what the Senate committee is suggesting. He described the stock’s price decline as “just temporary.”