This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bill Flap Could Lift Lincare

A so-called clerical error could spare home health care providers like Apria (AHG) and Lincare (LNCR) from deep Medicare cuts.

Some people claim the House of Representatives never actually passed the official Deficit Reduction Act that was apparently signed into law last month by President Bush. By the narrowest of margins, these people insist, the House passed a slightly different bill calling for more generous Medicare coverage. They add that due to this clerical error, only the Senate's version of the bill wound up on the president's desk.

As a result, a diverse group of critics has called for the law to be thrown out. Some Democrats in Congress contend the missteps point to an abuse of power by the administration, while Jim Zeigler -- a past member of Bush's own legal team -- has sued to have the law declared unconstitutional for other reasons.

"This is Constitutional Law 101," Zeigler told on Tuesday. "The same bill must pass the House and the Senate and then be signed by the president. Case over."

The dispute could undermine a measure that stood to sharply reduce reimbursement for companies like Apria and Lincare.

Critics say the House and Senate passed bills that differ in one critical way. Specifically, they say, the House voted for Medicare to cover durable medical equipment for 36 months. In contrast, they say, the Senate voted for Medicare to cover only oxygen equipment for 36 months -- and other supplies for just 13 months.

Previously, they add, Medicare covered durable medical equipment indefinitely.

CRT Capital analyst Sheryl Skolnick says that players throughout the health care industry have reason to dislike the law. Skolnick points to medical equipment suppliers, including Walgreen (WAG), and respiratory therapy players like Apria and Lincare in particular.

Skolnick then goes on to name some less-obvious victims as well. She says that home nursing providers, such as Amed (AMED) and Gentiva (GTIV), face Medicare cuts of their own. But, if anything, she portrays free-standing imaging companies among the hardest hit of all.

Under the new law, Skolnick estimates, those imaging companies face a 6% cut in Medicare payments this year and a far deeper cut -- of between 21% and 25% -- the next.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs