Apria grows sleep biz, despite drag on supply

INDIANAPOLIS – As Apria looks to the end of the year, the availability of CPAP devices is a “wild card,” says CEO Dan Starck. 

“We saw a sustained increase in incoming volume through Q3 and continue to see it in October and November,” he said on a call to discuss the company’s most recent financial results. “If we could get our hands on more equipment, we’d have much more growth in the quarter from a sleep standpoint.” 

Apria’s sleep business increased nearly 6% to $118 million in the third quarter this year compared to the same period last year, despite the headwinds presented by both the Philips recall of certain CPAP devices and supply chain challenges. 

The company does expect things to improve in the fourth quarter, thanks in part to a new source for CPAP equipment, which made a delivery in October, says Starck. 

“The (supply chain shortages) impacted our primary source, thus impacting our new patient set ups,” he said. “We believe this bodes well for us.” 

Apria’s home respiratory business grew 4.2% to nearly $119 million, driven by the Delta variant and higher reimbursement levels, offset partially by the recall. 

“The surge from the Delta variant provided a boost – the spike was so pronounced that new patient starts in August were higher per day then the peak last winter,” he said. “That’s starting to decrease, but it’s still at elevated levels.”  

With the public health emergency extended through mid-January and a new national coverage determination for oxygen coming out, Apria expects to end the year on a “high note,” says Starck. 

Also brightening Apria’s outlook: e-prescribing. Apria, along with Lincare, AdaptHealth, Rotech, AAHomeacre and VGM, recently launched DMEscripts, a platform that they hope will eventually be widely adopted, although Stark said it is too early to discuss financials. 

“Our view is this is a matter of when, not if, and e-prescribing is the future of the industry,” he said. “Realistically, this won’t happen overnight. It will take time and the benefits will grow over that time period.”