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Biotech / Medical : Oxford Health Plan (OXHP) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Haegin who wrote (1027)	2/12/1998 7:35:00 AM
From: Thomas Haegin	Read Replies (2) \| Respond to of 2068

Repost: Oxford quest hints at preparation for new reserves New reserves for Medicare, maybe? -Thomas -----Start------------------ Reuters Story - February 11, 1998 16:42 ÿÿ NEW YORK, Feb 11 (Reuters) - Industry experts said Wednesday a possible reason Oxford Health Plans Incÿ is courting loans and investor capital is to raise additional reserves that might be required by New York regulators. ÿÿ Oxford spokeswoman Nicole Reilly confirmed published reports that the health maintenance organization obtained a $100 million bridge loan last week from Donaldson Lufkin & Jenrette and had an option to borrow another $100 million from the investment firm. ÿÿ "The money will be used as capital contributions to certain of our five HMO subsidiaries and for general corporate purposes," Reilly told Reuters, noting the HMO subsidiaries consisted of separate operations in New York, New Jersey, Connecticut, New Hampshire and Pennsylvania. ÿÿ Reilly declined to comment on reports Oxford had opened its books to a number of companies considering making investments in the troubled Norwalk, Conn., company, including the buyout firms Texas Pacific Group and Kohlberg Kravis Roberts & Co. ÿÿ But she confirmed Oxford plans to replace the DLJ loan with permanent financing and would release details "by the end of the month," adding that clear specifics on how the money will be used were not yet available. ÿÿ New York health care benefits consultant Henry Moyer said senior Oxford officials Tuesday told him they were working on a number of equity deals with potential investors. ÿÿ "And they stated very clearly they had to raise their reserves and that's why they're looking for additional capital," said Moyer, a partner in Hirschfeld Stern Moyer and Ross. ÿÿ Moyer noted that Oxford cautioned in December it expected to report a net loss of $120 million for the fourth quarter because of its need to increase medical claim reserves in New York state by $164 million and to boost reserves by $36 billion in Connecticut and New Jersey. ÿÿ The infusions, bringing the company's total reserves to $1 billion, were required by regulators in the wake of management problems and computer snags that created massive billing delays and overestimates about membership and revenues. ÿÿ Moyer said Oxford, expected to report fourth-quarter results by late February, could cause more concern among state regulators if its loss for the quarter is greater than the projected $120 million. ÿÿ "If that happens, I wouldn't be surprised if their reserve requirements are raised again," Moyer said. ÿÿ Piper Jaffray analyst Russ Johnson said he agreed Oxford's search for capital was likely geared toward building reserves, funds required by regulators to guarantee insurers can pay all potential medical claims by policyholders. -------End-----------