The rural healthcare services company Community Care of America blamed a drastic dip in its stock last week on a probe into one of its long-term-care facilities in Iowa. Naples, Fla.-based CCA's stock dipped nearly 13% to $10.25 a share on March 20, two days after HCFA decertified one of its nursing homes. HCFA's decision came after the Iowa Department of Inspections and Appeals said a CCA facility in Council Bluffs, Iowa, failed to eliminate five violatio ns of healthcare standards. "We do not believe this matter will materially affect our operations," CCA President and Chief Executive Officer Kenneth Creasman said. CCA said it is appealing the state ruling and has worked to corre ct the problems, which the company said existed when they bought the facility last April.
The boards of Central DuPage Hospital in Winfield, Ill. and Edward Hospital in Naperville, Ill., last week approved a letter of intent to me rge. Combined, Edward and Central DuPage have more than $330 million in assets. The two have committed to a full-asset merger after beginning exclusive discussions earlier this year (Jan. 29, p. 18). In 1994, Central DuPage posted net income of $24.9 million on net revenues of $164.6 million, while Edward had net income of $6.7 million on net revenues of $104.9 million for the same year, according to the latest financial information available from HCIA, a Ba ltimore-based healthcare information company. The merger is expected to be completed by July 1.
A cornucopia of healthcare services will be available to the residents of southeast suburban Memphis, Tenn., after the Tennessee Healt h Facilities Commission last week approved certificate-of-need applications filed by competing not-for-profit hospital systems in Memphis to expand their operations. The state approved Baptist Memorial Health Care System's plan to build a $38 million, 60-bed satellite hospital in Collierville, about 15 miles southeast of Memphis. The state also approved Methodist Health Systems' $16.9 million plan to expand and renovate its 120-bed hospital in Germantown, a city of 38,000 between Memphis and Collierville (March 25, p. 62).
AMBAC, a New York City-based financial services company, has abandoned a plan to cash out its 46% stake in HCIA, a Baltimore-based healthcare information company, through a sale of senior debt securities. The company said it has withdrawn its registration for the debt securities offering because of "an unanticipated change in accounting treatment." Instead, AMBAC plans to offer its HCIA sh ares in a secondary public offering during the second quarter of 1996. The debt securities structure would have allowed AMBAC to defer certain taxes. The company had no further comment on the financial impact of proposed switch. AM BAC's decision will have no effect on HCIA's financial statements.