athenahealth, Inc. (ATHN) successfully implemented the Meaningful Use Stage 2 (MU2) criteria across its nationwide, cloud-based network. Amid negative market vibes regarding stagnating booking growth and saturated underlying markets for the company, this positive piece of news should boost investor confidence in the stock. The company’s stock returned an impressive 44.3% to its investors on a year-to-date basis.
At the Medical Group Management Association (MGMA), ATHN announced that its athenaNet clients can start practicing under the MU2 criteria from this month. This has allowed eligible professionals to report as per Stage 2 rules and has also provided them the opportunity for attestation in the first quarter of 2014. Upon attestation, eligible providers and hospitals will qualify for funding under the Medicare and Medicaid EHR Incentive Programs.
athenahealth also plans to release its ICD-10 readiness center in this quarter, as part of the company’s ICD-10 guarantee. The center will use ATHN’s resources to provide its customers a complete view of organizational, payer, and supply chain readiness.
Moreover, in its "Better Now -- Guaranteed" initiative, management guarantees that all eligible providers who partner with ATHN to attest for Stage 1 or Stage 2 incentive payments will receive them within the first year in which they qualify. All providers who use athenaClinicals now use a 2014 Certified Complete EHR.
Despite a 20% provider dropout rate from the Meaningful Use (MU) program in 2012, management asserted that 96% of its clients successfully attested in 2012 that helped them to receive incentives. Moreover, the company considers 2014 to bring in significant changes within the healthcare sector, and thus remains committed to assist its clients with MU attestation as well as ICD-10 transition.
Additionally, the company will be showcasing its athenaClinicals, athenaCommunicator, Epocrates and the new Epocrates Bugs + Drugs at the MGMA conference. Recently, athenahealth’s subsidiary Epocrates launched a new mobile application (app), Epocrates Bugs + Drugs, which combines cloud-based clinical data with a user-friendly mobile interface.
The app is designed to locate local bacterial superbugs (bacteria that are resistant to antibiotics) and assist physicians to timely prescribe appropriate antibiotics. The much awaited “Epocrates Bugs + Drugs” is now available for free on iOS 7 devices in the Apple App Store.
Currently, athenahealth has a Zacks Rank #5 (Strong Sell). The company had reported disappointing results in the second quarter of 2013. Adjusted loss per share of 21 cents was a major setback, lagging the Zacks Consensus Estimate of earnings of 8 cents per share. Moreover, the result was worse than the year-ago earnings per share of 13 cents.
While we strongly recommend avoiding this stock, other better-placed medical stocks that are worth a look include Cardinal Health, Inc. (CAH), Bio-Rad Laboratories, Inc. (BIO) and STRAUMANN HLD N AKT (SAUHF). All these stocks carry a Zacks Rank #1 (Strong Buy).