Apria Healthcare Stock Rises on Medicare News
Shares of Apria Healthcare Group Inc. jumped 21% Tuesday as word circulated that federal cuts in Medicare reimbursement for oxygen therapy for home-based patients may not be nearly as deep as expected.
Amid an industry-wide price surge in stocks of home health-care companies, Costa Mesa-based Apria rose $4.75 a share to close at $27.50. Nearly 3.4 million shares changed hands, several times the company’s normal trading volume.
Lawrence Smallen, Apria’s chief financial officer, attributed the stock movement to “rumors” that a Medicare bill in congressional conference committee would trim reimbursements by 20%.
That’s half the 40% cut previously contemplated in a Senate version of the bill. News late last month of the Senate proposal prompted a general retreat in home health-care stocks. Apria’s stock tumbled $4.75, or 16.5%, on Sept. 25, closing at $24. Analysts have said that oxygen therapy accounts for 20% of Apria’s revenue.
Apria was formed by the merger last summer of two Orange County home health care giants, Abbey Healthcare Group Inc. in Costa Mesa and Homedco Group Inc. in Fountain Valley.
