As of September 30, 2007, we were engaged in two reportable business segments:
Medical Products and Insurance Services. Additional information regarding our business segments can be found in Note 9 of our condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.
Medical Products
Home Delivery of Medical Products
We distribute medical equipment and supplies and dispense physician-prescribed medications nationally from our licensed pharmacy in the State of Florida. We currently provide home delivery of diabetes, ostomy and other medical products, including impotency devices, heating pads, prescription medications, and insulin pumps and pump supplies. These products are generally covered under Medicare Part B, Medicare Part D, state Medicaid programs or through relationships with managed care organizations. As of September 30, 2007, we had approximately 77,000 patients to whom we or Diabetes Care and Education, Inc., which we acquired via stock acquisition in September 2007, have shipped medical products and supplies in the last 15 months and that have not cancelled our service. The Federal Medicare program provides reimbursement to its beneficiaries for a number of products under Medicare's Part B or Part D coverages. Products covered under Part B include, among other items, supplies used to treat diabetes and ostomy, and Part D covers self-administered prescription drugs. Medicare Part B pays us 80% of the Medicare allowable fees for these products after the beneficiary has satisfied his or her annual deductible amount, and we bill the remaining balance to either third party payors, such as a patient's supplemental insurance carrier, or, where permitted, directly to the patient. We accept assignments of Medicare benefits, ship supplies and medications to patients and bill and receive payments from Medicare and certain private insurers on behalf of patients (and bill patients or their supplemental insurers for any co-payment and/or deductible). Revenue from Medicare, which relates to our Medical Products segment, represented approximately 34% and 47% of our total revenue for the three months ended September 30, 2007 and 2006, respectively, and approximately 37% and 42% of our total revenue for the nine months ended September 30, 2007 and 2006, respectively.
On September 4, 2007, we acquired all of the issued and outstanding capital stock of Diabetes Care and Education, Inc. (DC&E). DC&E is a provider of insulin pumps, pump supplies and blood glucose monitoring equipment and supplies through its three facilities in Kentucky, North Carolina and South Carolina. DC&E also offers diabetes education to individuals through its American Diabetes Association recognized education programs. This acquisition was made as part of our strategy to add customers and expand product offerings that are complimentary to our diabetes supplies business, and DC&E has become a part of our Medical Products segment. We paid cash at closing of $2.5 million and issued 473,933 unregistered shares of our common stock with a fair value of approximately $0.5 million. We may also be obligated to pay additional cash consideration totaling up to $4.5 million if revenue associated with DC&E's operations in 2008, 2009 and 2010 exceed certain targets. Retail Program
