Activa Medical proves there's life after audit, embraces cash sales

RALEIGH, N.C. - After Medicare broke the camel's back in the form of a $1 million audit, provider Vince Cole decided it was time for a change.

In August, Cole, along with Patrick O'Brien, launched Activa Medical, which provides CPAP machines and supplies and home sleep tests through www.activa-medical.com. The provider accepts no insurance.

"We decided to go into an area that will hopefully be growing, where we can serve our patients better, and stick around for the long term," said Cole. "We don't have to work with insurance companies and deal with Medicare and Medicaid, or deal with the changing regulatory landscape."

It's no surprise Cole doesn't care to deal with Medicare. His previous company (he didn't want the name published) was a full line, $20-million DME company. When Medicare sought $1 million in repayments from the company, he fought back and won. However, it took three years and cost more than $300,000 in legal fees.

Cole sleeps better these days.

"It's nice to not have to go to bed every night wondering what kind of changes are on the horizon with respect to anything that happens in Washington," he said.

Most of Activa's customers--Cole estimates between 60% and 70% have some kind of insurance--are willing to pay out of pocket to save money. Many of those customers are either already compliant with their therapy and don't need costlier, downloadable machines, or would prefer to just use CPAP when they want, say a few hours a night or a few days a week.

The company offers 24/7 support by phone, email or electronic chat. Cole says the web-based business model will allow Activa Medical to expand more easily. The provider is already eyeing diabetes testing supplies, as well as the international market.