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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 27, 1997
OXFORD HEALTH PLANS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19442 06-1118515
(State or other jurisdiction) (Commission (IRS Employer
of incorporation) File Number) Identification No.)
800 Connecticut Avenue, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
(203) 852-1442
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
Registrant's Press Release, dated October 27, 1997, is attached as an
Exhibit hereto and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
(99) Press Release dated October 27, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OXFORD HEALTH PLANS, INC.
Date: October 27, 1997 By: /s/ ANDREW B. CASSIDY
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ANDREW B. CASSIDY
Executive Vice President
Chief Financial Officer
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ------
(99) Press Release dated October 27, 1997 4
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EXHIBIT (99)
OXFORD LETTERHEAD
Re: Oxford Health Plans, Inc.
800 Connecticut Avenue
Norwalk, CT 06854
For Further Information:
Stephen F. Wiggins
Chairman
(203) 852-1442
FOR IMMEDIATE RELEASE
October 27, 1997
OXFORD HEALTH PLANS REPORTS REVISED THIRD QUARTER EXPECTATIONS
NORWALK, CONNECTICUT, OCTOBER 27, 1997 -- Oxford Health Plans, Inc.
(NASDAQ:OXHP) today announced that it expects to report a charge to net earnings
of between $47 to $53 million in the third quarter. The charge allows Oxford to
make additions to reserves for medical claims. Additionally, the Company will
report lower revenues for the third quarter than originally expected due to
adjustments to membership resulting from delayed premium bills. Consequently,
the Company expects to report a loss of between $.83 and $.88 per share for the
quarter.
"These adjustments recently came to the Company's attention as a result of
reviewing and reconciling previously delayed premium bills and medical claims,"
said Stephen F. Wiggins, Oxford's Chairman. "We overestimated how much of our
customer accounts receivable were collectable, and the catch up of claims
payments revealed payment obligations that exceeded our original estimates. Much
of the charge relates to expenses incurred in prior periods".
Delays in generating premium bills from September 1996 to June 1997 adversely
affected the Company's ability to ultimately collect premiums due. Billings
became current during the third quarter and the Company began intensive efforts
to reconcile and collect accounts receivable. As a result of information
recently gained from that process, Oxford reduced its membership estimates for
the third quarter to account for these retroactive changes. The Company expects
revenues for the third quarter to be $111 million lower than previous estimates.
Membership at September 30, 1997 is expected to be 1,942,600.
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Oxford also stated that it was raising its estimates of future Medicare expenses
and planned additional administrative expenditures during 1998 to strengthen
operations. These two factors lower fourth quarter earnings estimates to a range
of $.25 to $.27 per share, not including the expected $.50 addition to earnings
per share expected from the sale of Health Partners, Inc. Management believes
increased costs will impact earnings estimates for 1998 by $.60 to $.80 per
share.
"The fundamentals of our business remain strong and these adjustments create
more reserves for the benefit of our customers," said Wiggins. "Despite the
membership adjustments, we still expect to report 109,100 additional members
during the third quarter, and strong enrollment growth continues. Further, the
information we have received to date has not changed management's assumptions
for commercial product pricing for 1998."
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release, such as statements
concerning the Company's results of operations, health care costs and
administrative costs, operations matters, and other statements regarding matters
that are not historical facts are forward-looking statements (as such term is
defined in the Securities Exchange Act of 1934, as amended); and because such
statements involve risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially include, but are not limited to,
1. Changes in Federal or State regulation relating to health care and
health benefit plans.
2. Rising medical costs or higher utilization of medical services,
including higher out-of-network utilization under point-of-service
plans.
3. Competition from health benefit plan providers and competitive pressure
on pricing Oxford products.
4. High administrative costs in operating Oxford's business, the Company's
ability to develop processes and systems to support its growing
operations and the cost and impact on service of changing technologies.
5. Those factors included in the Company Annual Report on Form 10-K filed
with the Securities and Exchange Commission and available from the
Company by calling 1-800-889-7546 ext. 1616.
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