Diabetes Care Club purchases competitor in move driven by federal contract effort

Acquisition positions Franklin company with Centers for Medicare and Medicaid Services

Franklin-based Diabetes Care Club has acquired Priority Diabetes Supply, making the company one of only 18 with a contract with the federal Centers for Medicare and Medicaid Services to distribute diabetic testing supplies to Medicare beneficiaries.

Financial terms of the deal were not disclosed in a release.

"The acquisition of Priority Diabetes Supply allows us to continue serving our current patients, while also offering a new home to patients who must move from their existing provider to one that has been approved and contracted through the competitive bidding program," Doug Hudson (pictured), chairman and CEO of Diabetes Care Club parent company Simplex Healthcare, said in a release.
In conjunction with the acquisition, Diabetes Care Club announced it has entered into an agreement with Roche Diagnostics Corp. to distribute its line of ACCU-CHEK products to Medicare recipients, ensuring that patients affected by the federal Durable Medical Equipment, Prosthetics/Orthotics, and Supplies Competitive Bidding Program are still able to find these supplies and receive uninterrupted service.

A mail order provider of diabetic testing supplies formed in 2007, Diabetes Care Club acquired Jupiter, Fla.-based Priority Diabetes Supply as part of a comprehensive business strategy the company developed following the 2011 decision by CMS to implement the competitive bidding program. CMS designed the program to significantly reduce health care costs by requiring providers to bid for contracts to distribute medical equipment and supplies, including mail-order diabetic testing supplies.  

Diabetes Care Club was not initially awarded a contract and implemented "its contingency plan" of acquiring Priority, which did win a contract.