Apria Signs OSA Suppliers, Does Not Renew Gentiva Contract

Lake Forest, Calif.

To accommodate the growing sleep apnea market, Apria Healthcare has extended its purchasing relationship with Murrysville, Pa.-based Respironics and has also signed shared primary supplier agreements with New Zealand-based Fisher & Paykel and Longmont, Colo.-based Sunrise Medical.

Respironics will remain a shared primary supplier for all CPAP sleep therapy units and accessories. The company will be the primary supplier for all bi-level and smart CPAP devices for the sleep apnea market and the single-source supplier for all infant apnea and sleep diagnostic equipment. Respironics will also continue as a shared primary supplier for volume ventilators.

Lisa Getson, Apria’s executive vice president, business development/clinical services, said the provider also named Fisher & Paykel as a shared primary supplier. Under terms of the agreement, the company will supply CPAP flow generators, CPAP humidifiers, ventilator humidifiers and patient interfaces. “The diverse needs of our patient base, such as an increased need for humidification, led us to create a contract with Fisher & Paykel because of their excellent integrated humidification solutions,” Getson said.

She said the company selected Sunrise Medical as a shared primary supplier specifically to serve its CPAP patients requiring electronic-compliance monitoring. When a patient requires e-compliance, “Internet-based solutions make more sense within the Apria business model than a mail-back solution does,” Getson said.

The agreements are the result of a CPAP task force Apria formed in mid-2003 to analyze the overall obstructive sleep apnea market and the needs of the company’s CPAP patients and referral sources, Getson said.

All three agreements extend through the end of the year.

In January, the company also announced that it is not renewing its Gentiva CareCentrix network contract because the parties could not reach an agreement on contract terms for 2004 and beyond. “The company expects this decision to reduce our 2004 revenue growth rate to the 5 to 7 percent range,” Apria President and CEO Lawrence Higby said in a press release. He added that the decision should have “no material effect” on 2004 earnings per share.

Apria currently serves more than a million patients each year through 430 branches in all 50 states.

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