LOUISVILLE, Ky. — Nationwide insurance carrier Humana has
selected Apria Healthcare as its provider of choice for home
medical equipment, according to the giant insurer's website.

Some small independents, which are already staggering under the
threat of competitive bidding, amped-up audits and Medicaid woes,
said the agreement is another big blow.

"I view this as being almost as threatening as competitive
bidding to the independent providers in America," said Jason Rogers
of Care Medical in Athens, Ga. "If this goes well, who is to say
this won't be Blue Cross, Medicaid and who knows who else? It won't
matter how good we are."

Humana said in a target="_blank">posted notice that it had established a
long-term relationship with Lake Forest, Calif.-based Apria to
provide its members' HME needs, "including home oxygen services,
CPAP/BiPAP equipment and supplies, home tube feeding and other
medical equipment services provided in the home." Apria will also
be an in-network provider for outpatient negative pressure wound
therapy, the insurer said.

"Please note that Humana's relationship with several home
medical equipment providers is being terminated," the website
noted. "Impacted Humana members will be informed of this change and
encouraged to transition their services to Apria."

At press time, Humana officials had not responded to email or
phone attempts to gain clarification. Apria's Lisa Getson,
executive vice president of government relations, was out of the
office but said she would respond to HomeCare.

NAIMES broke the news to its members in a newsletter last week,
confirming the association had heard from Kentucky providers who
had been asked to provide Humana with a list of patients who would
need to be transitioned to Apria. "Kentucky independent suppliers
and other national companies stand to lose thousands of patients to
Apria under this arrangement," the association reported.

Some national providers targeted for termination began receiving
notices in May alerting them to the Sept. 1, 2011, switchover,
according to NAIMES. Smaller independent companies received a
mailing this month.

"The way we were notified, Humana basically said, 'Here is a
page of 20 data criteria. We want all of this filled out for each
patient who has a piece of equipment with you,'" Rogers said. "They
are going to turn that over to Apria. That is rubbing salt in the

Rogers said there is confusion about which beneficiaries in
Humana's scores of plans are affected or whether providers would be
able to continue to service some patients in Humana's third-party
plans. Calls to Humana with such questions have been essentially
fruitless, he said.

"This is a very dangerous situation for the industry but a
quietly simmering one," Rogers said, adding that "everyone in the
industry should be aware of it and should be fighting it."

A Kentucky provider said he believes the agreement is nationwide
and "extends to all lines of Humana's business … If 15
percent of your business is Humana, it will go away," he said. "I
think it is for real, and it is a disturbing situation."

Representatives of the Kentucky Medical Equipment Suppliers
Association contacted Humana after hearing the news and were told
that small independents were still in the network, that it was not
an exclusive contract and their pricing would be honored. But since
those discussions, the provider said, he believes it is clear that
beneficiaries have two choices: Go with Apria or go out of the
network and come up with a 50 percent copay.

He is fearful providers billing out of network could see prices
"50 to 60 percent below Medicare; you're looking at a $72
concentrator," he said, noting that is an impossible rate for small

KMESA has taken the issue to the state's commissioner of
insurance in hopes of a resolution. Kentucky is an "any willing
provider" state, and providers are hoping that could negate
Humana's plan in the state. As of Friday, sources said, there had
been no response from the commissioner's office.

Mike Hamilton, executive director of the Alabama Durable Medical
Equipment Association and senior adviser for the newly formed
Tennessee HME association
, said that while Alabama providers
have not so far been affected by the agreement, Tennessee providers

Blue Cross Blue Shield holds the power in Alabama with 93
percent of the market, he said, so Humana is not a big factor in
the state. But providers in Tennessee have received letters of
termination, he said.

"A lot of providers are going to be in some serious trouble,"
Hamilton said. "Apria might be buying up some bargains."