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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): NOVEMBER 6, 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.
The Company's Press Release, dated November 6, 1997, is attached as an
Exhibit hereto and incorporated herein by reference.
As previously reported, the New York State Insurance Department (the
"Department") is currently conducting its triennial examination and market
conduct examination of the Company's New York HMO and insurance subsidiaries,
and in the course of such examinations the Department has investigated claims
payment delays by the Company. The Department has also expressed concern over
delays in payment of claims by health plans generally and is investigating
health plans state-wide.
In its examination of the Company's New York HMO and insurance
subsidiaries, the Department has also investigated various other regulatory
issues and, as a result of a preliminary review, has requested that the Company
retain an information systems consulting firm to assess claims payment delays
and other areas of concern and to report to the Department regarding the scope
and progress of projects to be implemented to address these concerns. In
addition, at the Department's request, the Company's New York HMO and insurance
subsidiaries' financial statements as of September 30, 1997 are being audited by
KPMG Peat Marwick LLP. Such audit is expected to be completed by December 3,
1997. The Department has also required the Company to take other remedial
measures and to submit a plan of corrective action with respect to areas of
alleged regulatory violations identified by the Department. Although the
Department has not issued a final report, the Company expects that the
Department will seek to impose a fine or other penalty in connection with
alleged regulatory violations. There are no specific guidelines for determining
the fines or penalties imposed in such cases. While the Company is unable to
estimate the amount of any potential fine or penalty, based on prior proceedings
of this nature before the Department, the Company does not believe that the
results of examination will have a material adverse effect on the Company's
financial condition or results of operations.
Certain statements contained in this report, including statements
concerning the impact on the Company of the Department's examinations, are
forward-looking statements as defined in the Securities Exchange Act of 1934, as
amended. Actual results may differ materially from those discussed. Factors that
could cause actual results to differ materially include, but are not limited to,
governmental action, the Company's ability to develop processes and systems to
support its growing operations and those factors included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 under the
caption "Business-Cautionary Statement Regarding Forward-Looking Statements",
incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
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(c) Exhibits
99(a) Press Release dated November 6, 1997
99(b) Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 1996 (Commission File No. 0-19442),
incorporated herein by reference.
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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: November 6, 1997 By: /s/ BRENDAN R. SHANAHAN
---------------------------------
BRENDAN R. SHANAHAN
Vice President and Controller
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
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<CAPTION>
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ------
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99(a) Press Release dated November 6, 1997 4
99(b) Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 1996 (Commission File No. 0-19442),
incorporated herein by reference.
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Exhibit 99(a)
OXFORD LETTERHEAD
FOR IMMEDIATE RELEASE
Contact:
Oxford Health Plans, Inc.
203-851-1020
OXFORD HEALTH PLANS ANNOUNCES STEPS TO
STRENGTHEN OPERATIONS
NORWALK, CONNECTICUT, NOVEMBER 6, 1997 - Oxford Health Plans, Inc.
(NASDAQ:OXHP) announced today a number of actions designed to strengthen the
Company's operations and provide additional assurance to customers and providers
concerning its products and services. These actions are being taken under a plan
approved by Oxford's Board of Directors and reviewed by the New York State
Insurance Department as part of their continuing examination of the Company. The
following actions were announced by the Company today:
1. The Company announced it had hired Kevin F. Hickey as an
Executive Vice President, focusing on operations. Mr. Hickey was
formerly President of Health Plans of America and Senior Vice
President of Operations at Aetna Managed Health Plans. At Aetna,
Hickey managed 55 service sites with 12,700 employees. These
service operations handled 38 million customer calls and were
responsible for the payment of more than $28 billion in claims
annually.
2. The Company is in the process of retaining nationally recognized
information systems consulting firms to review and report on its
information systems capabilities and strategic plan, and to
correct shortcomings in Oxford's processing of claims and
premiums, all of which will facilitate its growing membership.
3. On Tuesday, November 4, 1997, the Company announced steps taken to
strengthen its reserves for medical claims. The Company's New York
subsidiaries will obtain an audit of their September 30, 1997
financial statements, including a certification of reserves, by
KPMG Peat Marwick LLP, to provide further assurance as to its
financial strength.
4. In addition to replacing the CFO, the Company is undertaking a
thorough review of its finance operations with a view to
strengthening management and systems where appropriate. KPMG Peat
Marwick LLP will provide additional resources to Oxford to assist
in this effort.
5. The Company's Board of Directors will be expanded by at least two
members, and professional firms have been retained to identify
candidates with substantial experience leading complex, high
transaction service businesses.
"These actions are being taken to solidify our operations and to assure a
smooth recovery from our recent challenges," said William Sullivan, Oxford Chief
Executive Officer. "We are taking steps necessary to demonstrate that our
customers and providers will be well served as Oxford works to further
strengthen its operations."
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