A big chunk of the restructuring of Columbia/HCA Healthcare Corp. fell into place late last week when the Nashville-based company agreed to sell its Value Behavorial Health subsidiary to FHC Health Systems of Norfolk, Va., for $230 million in cash.
The deal is expected to be completed within 90 days pending federal and state regulatory approvals.
Value Behavorial is a division of Value Health, which Columbia acquired last August for $1.1 billion. The Value Health sale was agreed to prior to the federal raid on Columbia facilities and the resignations of Columbia's top two executives.
After the raid and resignations, Columbia completed the sale but said it would be divesting three of Value Health's four divisions.
The other two on the selling block are Value Health's pharmacy benefits management business and an information technology division.
Columbia spokesman Jeff Prescott said sales efforts regarding the two divisions were "moving forward."
Columbia is keeping Value Health's workers' compensation and group health network.
FHC's Options Health Care subsidiary will operate Value Behavorial after the acquisition, making Options Health the nation's second largest managed behavioral healthcare company with projected annual revenues of more than $580 million in 1998.
Meanwhile, Columbia late last week confirmed that it didn't report an additional $3.7 million in severance benefits enjoyed by former Chairman and Chief Executive Officer Richard Scott and President and Chief Operating Officer David Vandewater in its November 1997 10Q filing with the Securities and Exchange Commission.
In the November filing, Columbia said Scott received nearly $10 million and Vandewater, $6.3 million. Prescott said the additional $2.5 million for Scott and $1.2 million for Vandewater are standard entitlements and weren't required to be reported to the SEC.