Lincare Q1 Earnings Hit Hard by Medicare Cuts

CLEARWATER, Fla. — Last week Lincare Holdings reported net
revenues for the quarter ended March 31 of $371.7 million,
down
10.5 percent from $415.4 million for the first quarter of
2008.

Net income for the quarter was $26 million, or 36 cents a share,
compared to net income of $58.2 million, or 76 cents a share, a
year earlier.

The results were impacted by “dramatic reductions” in Medicare
reimbursements, a company release said, citing the 9.5 percent cut
on certain DME and the 36-month cap on oxygen that took effect Jan.
1. The release also noted lower ASP (average sales price)
reimbursements for respiratory medicines, primarily albuterol. Drug
reimbursements for the 2009 quarter were $22 million less than in
the same period last year.

Lincare did not alter its estimate of the full-year impact of
the Medicare changes, which it said in February would be $240 to
$255 million (see Lincare Predicts
Rough 2009, Feb. 23). The company serves more than 700,000
customers in 48 states through 1,056 locations.

“The Medicare changes effective as of January 1 of this year
have had an enormous impact on our business,” John Byrnes, Lincare
CEO, said in the release. “We are confident that we are uniquely
positioned to gain market share in our core respiratory business as
our competitors struggle to deal with the severe financial
consequences of the Medicare cuts.”