Businessweek

Hanger, Inc. provides orthotic and prosthetic (O&P) patient care services; distributes O&P devices and components; manages O&P networks; and provides therapeutic solutions to the post-acute market. The company, through its subsidiary, Hanger Prosthetics & Orthotics, Inc. (Hanger Clinic), owns and operates O&P patient care clinics in the United States. The company, through its distribution subsidiary, Southern Prosthetic Supply, Inc. (SPS), distributes O&P products in the United States. The company also provides therapeutic solutions through its subsidiaries, Innovative Neurotronics, Inc. (IN, Inc.) and Accelerated Care Plus Corp. (ACP). Segments The company operates through three segments: Patient Care, Distribution, and Therapeutic Solutions. Patient Care As of December 31, 2012, Hanger Clinic provided O&P patient care services through approximately 740 patient care clinics and approximately 1,300 clinicians in 45 states and the District of Columbia. The company, in its orthotics business, designs, fabricates, fits, and maintains a range of custom-made braces and other devices (such as spinal, knee, and sports-medicine braces) that provide external support to patients suffering from musculoskeletal disorders, such as ailments of the back, extremities or joints and injuries from sports or other activities. In its prosthetics business, the company designs, fabricates, fits, and maintains custom-made artificial limbs for patients who are without limbs as a result of traumatic injuries, vascular diseases, diabetes, cancer, or congenital disorders. Patients are referred to Hanger Clinic by an attending physician who determines a patient's treatment and writes a prescription. The company’s clinicians then consult with both the referring physician and the patient with a view toward assisting in the design of an orthotic or prosthetic device to meet the patient's needs. The principal reimbursement sources for the company’s services are commercial and other, which consist of individuals, rehabilitation providers, private insurance companies, HMOs, PPOs, hospitals, vocational rehabilitation, workers' compensation programs, and similar sources; Medicare, a federally funded health insurance program providing health insurance coverage for persons aged 65 or older and certain disabled persons, which provides reimbursement for O&P products and services; Medicaid, a health insurance program jointly funded by federal and state governments providing health insurance coverage for certain persons based upon financial need, regardless of age, which might supplement Medicare benefits for financially needy persons aged 65 or older; and U.S. Department of Veterans Affairs. Provider Network Management: The company’s subsidiary, Linkia LLC (Linkia), is a provider network management company dedicated to serve the O&P market. Linkia manages the O&P services of national and regional insurance companies. Linkia partners with healthcare insurance companies by securing a national or regional contract either as a preferred provider or to manage their O&P network of providers. Linkia's network includes approximately 1,120 O&P provider locations, including approximately 390 independent providers. As of December 31, 2012, Linkia had 55 contracts with national and regional insurance companies. Distribution This segment, through SPS, distributes O&P products, components, devices, and supplies to independent customers and to the company’s own patient care clinics in the O&P and post-acute rehabilitation industry. SPS is also a fabricator and distributor of therapeutic footwear for diabetic patients in the podiatric market. SPS maintains in inventory approximately 33,000 individual SKUs manufactured by approximately 390 different companies. SPS operates distribution facilities in California, Florida, Georgia, Illinois, Pennsylvania, and Texas, which allows the company to deliver products through ground shipment anywhere in the contiguous United States within two business days. Marketing of the company’s Distribution services is conducted on a national basis through a dedicated sales force, print and e-commerce catalogues, and e