Police pension sues Pediatrix. Jacksonville, Fla.'s finest are among those seeking to lead a shareholders' class-action lawsuit against Pediatrix Medical Group.
The Jacksonville Police and Fire Retirement Fund on March 17 filed a lawsuit against Pediatrix, a neonatology and perinatology practice management company, in U.S. District Court in Miami.
The fund, which owns about 6,000 of Pediatrix's 15.2 million shares, seeks to be lead plaintiff in a case representing everyone who bought Pediatrix stock between April 28, 1998, and Feb. 12, when the company's stock crashed 48% to $28.
The stock fell after Fort Lauderdale, Fla.-based Pediatrix said it might have to restate past earnings because of accounting problems. The Jacksonville suit is one of at least nine filed against Pediatrix.
Online companies go for cash. Two medical online companies are trying to pump up their operations with more cash, one through private financiers and another through an initial public offering.
New York-based Medscape, which claims 1 million registered members on its physician and consumer clinical information site, on March 18 said it closed on $21 million of venture-capital financing. Medscape in late February hired as its editor-in-chief George Lundberg, M.D., the fired editor of the Journal of the American Medical Association.
On March 5 Austin, Texas-based drkoop.com filed for an IPO on the Nasdaq National Market. The number and price of shares involved have not been determined. So far this year, drkoop.com has had 2.6 million visitors to its Internet site, which contains clinical information. Former U.S. Surgeon General C. Everett Koop, M.D., is drkoop.com's chairman.
Court takes creditors' hands off HIP. Creditors for bankrupt PHP Healthcare
Corp. may not take assets from defunct HIP Health Plan of New Jersey to satisfy the physician practice management company's debt, a judge ruled.
In U.S. District Court in Wilmington, Del., Judge Sue Robinson on March 11 ruled that the U.S. Bankruptcy Court could not force the New Jersey Department of Banking and Insurance to place in escrow $12 million from HIP's liquidation.
That money would have been used to pay off PHP's secured creditors, which include banks. They say they have a right to HIP's money because of a 20-year deal PHP signed in 1997 to manage HIP clinics. Those clinics closed March 31 upon HIP's demise.
In other action, HIP Health Plan of New York on March 22 dropped its $90 million lawsuit against three former and current PHP executives because it believes the Bankruptcy Court would not have allowed it to proceed with the case.
The suit, filed Dec. 7 in New York, charged the executives with fraud for failing to make HIP aware of PHP's financial problems. PHP's Nov. 19 bankruptcy filing made the company immune from lawsuits.
Merger on despite stock dive. American Oncology Resources says it will close its acquisition of Physician Reliance Network, even though the deal is worth about 30% less than when it was announced Dec. 14.
As of March 22, American Oncology, a Houston-based physician practice management company, traded for $8 per share, compared with $13 when the deal was announced.
American Oncology is exchanging 0.94 of a share of its stock for each share of Physician Reliance Network, a Dallas-based PPM with 51.4 million shares outstanding.
American Oncology says the deal would give it 13% of the oncology treatment market nationwide.
Including assumed debt, the value of the deal as of March 22 was $506.4 million, compared with $715 million in December.
David Padgett, American Oncology's director of planning and budgeting, blamed investor skepticism about the PPM market for the company's stock dive. Physician Reliance has gone down in tandem with American Oncology, falling to $7.38 March 22 from $11.50 Dec. 14.
Docs key to HMO satisfaction. Consumer satisfaction with health plans depends on having a choice of physicians, says a new study from the Medstat Group, an Ann Arbor, Mich.-based healthcare information consulting organization.
The study is based on the responses of 32,000 enrollees in 20 markets who were asked to identify and rank the importance of 11 categories measuring plan performance. Physician-related performance categories accounted for almost 50% of a health plan's overall rating. Choice of providers was most important to enrollees.
"Plans traditionally focus on administration and customer service," says Medstat Senior Vice President Dennis Becker. "But these findings suggest a larger payoff will result if plans improve the patient-care aspects of their service offerings. This area is sometimes ignored because plans see it as the provider group's responsibility and not their own."