Liberty Medical exits Medicare market

PORT ST. LUCIE, Fla. - Mail-order provider Liberty Medical Supplies is getting out of the fee-for-service diabetes supply business, according to local news reports.

Liberty will reportedly sell its Medicare diabetes business to Coral Springs, Fla.-based Arriva Medical. As a result, Liberty will also lay off approximately 250 employees at its location here, and another 200 at its Salem, Va., location, according to multiple reports.

The announcements come just days after a group of Liberty Medical executives bought the business from its parent company, pharmacy benefit giant Express Scripts.

The moves should come as no surprise. Since April 2012, when Express Scripts, in a $29 billion deal, merged with Medco Health Solutions, then-parent of Liberty, Express Scripts has made it clear that Liberty Medical would not figure in its future plans. With a national mail-order program set to kick off in July 2013 and increased documentation requirements, the market isn't an attractive prospect for many companies, although a few, like Arriva, are positioning themselves to be a large player in the market. Earlier this year, Arriva acquired Direct Diabetic Source and AmMed Direct.

Liberty plans to remain in the Medicare Advantage program and also focus on the commercial diabetes market, including insulin pumps. The provider also offers urological and ostomy supplies, and operates a mail-order pharmacy.

The laid-off employees will be given severance packages according to their positions, Liberty CEO and Chairman Frank Harvey told local news outlets. Harvey said he expects Arriva to hire many of them, at least temporarily.

[See also: Bid program shakes up diabetes market]