PPM/MSO News
• Nasdaq halted trading in shares of BMJ Medical Management (Boca Raton, FL) in order to request additional information from the company. Trading will remain halted until the company provides the information. Its shares last traded at 5/32. The company filed for bankruptcy protection in December and has announced it won’t complete its quarterly report on time.
• Complete Management (New York) failed to pay interest on its 8% convertible subordinated debentures, saying it has a 30-day grace period before it defaults. The payment was due Feb. 15. The company trades its shares on the over-the-counter bulletin board and is exploring funding alternatives to pay the interest, reported Dow Jones News Service.
• IntegraMed America (Purchase, NY) has reported a net loss for FY98 of $4.7 million, 94 cents per share, on revenues of about $38.6 million, compared to a net income for FY97 of $374,000, 8 cents per share, on revenues of $20.6 million. The results include restructuring and other charges incurred in 2Q. Revenues for 4Q98 ended Dec. 31 were $10.7 million, compared to $7.2 million the previous year. Net income was $434,000, 8 cents per share, compared to $217,000, 4 cents per share, in 4Q97.
• Under the scrutiny of auditors, Pediatrix Medical Group (Fort Lauderdale, FL) watched its shares fall 5.8% to $26.375, then another 75 cents to $25.625, reported The Wall Street Journal. When the company warned that it might need to restate its earnings, shares sank another 48%. Auditors asked the company for more information on accounts receivable and questioned why the company capitalized bonuses to its acquisition team, rather than treated them as expenses. In 1998, Pediatrix stock climbed about 40% while the stocks of other PPM companies dropped.
• Response Oncology (Memphis, TN) terminated its physician practice management contract with Knoxville Hematology/Oncology Associates, taking a $28- $32 million pre-tax charge for write-off costs and accounts receivable. The company expects the write-off of this contract and others will reduce FY99 amortization expenses by $1.4 million, as well as enhance future earnings. Analysts estimate the company will earn 8 cents a share in 4Q98.
• Using hardball tactics, some medical providers in Orange County, CA, are threatening to terminate contracts with health maintenance organizations if reimbursement for patient care isn’t increased, reported The Orange County Register. Officials of St. Joseph Health System, which controls some 550 primary care and specialty doctors who treat 385,000 HMO patients, said that at least two HMOs tried to cut reimbursement rates, then agreed to increases after the system threatened to terminate the contract, the Register reported.
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