AdaptHealth sees ‘pay off’

PLYMOUTH MEETING, Va. – AdaptHealth’s respiratory and sleep product lines grew a combined 15% year-over-year in the second quarter, boosted by strong new patient setups. 

The sleep business was especially strong in the quarter, with a 41% increase in patients and a 16% increase in revenues to $303 million. Resupply orders increased 11%. 

“The investments we've made in this business line over the past year are now paying off,” said Richard Barasch, chairman and interim CEO, on a recent earnings call. “We have enough equipment on hand to satisfy demand, and we've improved our processes in new starts, especially in resupply. Industry data shows that we are the clear leader in sleep and have gained market share over the past year.” 

Revenue from other respiratory products increased 13% to $154 million. 

Diabetes ‘deep dive’ 

After a “disappointing” Q1 in which AdaptHealth’s diabetes business declined for the second straight quarter, the segment experienced a “modest rebound” in the second quarter, said Barasch. Diabetes revenue was up 2% and the company’s CGM patient census increased 13% over the prior year. 

“We did not react swiftly enough to changing market dynamics and are committed to resuming growth in this crucial market,” he said. “Over the past three months, we've done a deep dive into all aspects of our diabetes business and have emerged with a solid plan to achieve results that reflect the growing market for diabetes supplies, especially CGMs and pumps.” 

Among other things, AdaptHealth plans to be more “intentional” in its focus on the rapidly growing government payer market, which now comprises 77% of its CGM business, says Barasch. 

On the commercial payer side, the company plans to update contracts to increase access to its current and new CGM patients, including through the pharmacy channel, he said. 

“We see this as an essential part of the strategy to offer full and creative solutions for our payer partners and patients,” he said. 

Humana rollout 

AdaptHealth provided a limited view into the ramp up of its Humana contract to provide HME to about 1 million Medicare Advantage HMO members. The company did say it’s “standing up” a dedicated onshore call center and doubling down within its sales force, said Jason Clemens, CFO. 

“I mean the number of referral points that this arrangement opens up is considerable – lots of new referral points that, frankly, we haven't earned a referral from, in some cases, ever or, in other cases, in a very long time,” he said. “And then, really, it's all about, again, that high touch, taking care of patients, reporting new service-level agreements to Humana around operational metrics, turnaround times and such. Patient satisfaction is just paramount here.”