PLYMOUTH MEETING, Massachusetts—AdaptHealth, the large publicly-traded home medical equipment supplier, has agreed to sell some or all of its complex rehab technology (CRT) business to National Seating and Mobility, the company announced during its quarterly earnings call.
Company officials said the move would help AdaptHealth focus in on its core home medical equipment business: sleep, respiratory and diabetes.
AdaptRehab, the company’s CRT division, offers CRT power wheelchairs and power seating, adaptive bathing equipment, standard power chairs and scooters and other items. But the company wasn’t focused on its CRT assets, which had mostly come in as a result of acquisitions over the years, Chief Financial Officer Jason Clemens said on the call.
“These were kind of collections of businesses acquired over years,” Clemens said. “We didn't maintain like a product leader and a distinct focus on growing it or driving efficiencies in that business. We think that National Seating & Mobility is going to be a terrific owner for that business. We think they're going to take very (good care of those) patients.”
The company reported a 1.6% increase in net revenue over the second quarter of 2023, to $806 million. Sleep revenue increased 6.5% in the same period, to $322.4 million.
“Notably, our sleep resupply census reached a new milestone in the quarter and now stands (at) over 1.6 million patients,” Clemens said.
Diabetes revenue, on the other hand, dropped $17.7 million over the prior year to $151.2 million. Much of the hit came from continuous glucose monitor (CGM) sales being flat due to three large payers shifting to 100% pharmacy reimbursement earlier in the year—but he says they have confidence in the direction CGM reimbursements are going.
“Effective July 1st of this year, they've reopened the DME (durable medical equipment) benefit. So it is essentially a dual channel reimbursement, which we believe is an indication of the value that DME drives versus the pharmacy,” Clemens said. “It's that constant touch. It's the adherence, it's the relationship with the patient, it's the access to the data that's getting generated from the CGMs.”
Diabetes pump and supply sales were worse than expected because, he said, soe patients held off on ordering tubeless pumps while the CGM compatibility was worked out; Clemens said they expect sales to pick up in the second half of the year.
Revenue from all other categories grew 3.3% over the previous year to $332.4 million, led by growth in respiratory that came from bringing on a large number of Humana patients.
The company experienced what Clemens called “incremental expense” associated with recovering from the Change Healthcare cyberattack and he said shipping lead times for sleep resupply products improved in June compared to April and May.
