Allegiant Physician Services last week put its pain-treatment operations up for sale after two agonizing years in the business.
In a related move, the company revised its 1994 report to show a loss of $10.4 million, or 99 cents per share, instead of earnings of $2.6 million, or 24 cents per share.
Allegiant's subsidiary, National Pain Institute, has been plagued with unpaid claims since it was purchased in 1992.
Also, the Atlanta-based company had trouble melding pain treatment with its main business, managing hospital anesthesiology departments, said Timothy L. Powers, executive vice president and chief financial officer.
NPI treated workers' compensation cases in California, but many claims went unpaid because of a slow litigation system handling such cases, Allegiant said.
NPI ceased operations in 1993, and Allegiant created a network of pain-relief clinics in Arizona, California and Texas, which still operate.
Allegiant's suit against the California insurers for $123 million is awaiting a trial. But as a result, some of those insurers stopped paying claims, resulting in 1994 losses of $8.4 million, Allegiant said.
The 1994 net loss included $3.6 million of discontinued operations from the company's decision to sell its pain-treatment subsidiary. Its pain-treatment centers account for about $12 million in annual revenues, Powers said.