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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): JANUARY 8, 1999
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 January 8, 1999 is attached as an
Exhibit hereto and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release dated January 8, 1999
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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: January 8, 1999 By: /s/ Kurt B. Thompson
-----------------------------------
KURT B. THOMPSON
Chief Accounting Officer
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ------
99 Press Release dated January 8, 1999 5
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EXHIBIT 99
For Further Information:
Investor Contact: Deborah Abraham
(203) 851-2636
Media Contact: Madeline Hardart
(212) 885-0417
Nicole Reilly
(212)885-0338
FOR IMMEDIATE RELEASE
OXFORD HEALTH PLANS, INC. PROVIDES PRELIMINARY JANUARY
MEMBERSHIP RESULTS AND GOVERNMENT PROGRAM DEVELOPMENTS
CEO Payson Reiterates Confidence in Plan.
NORWALK, CONNECTICUT, January 8, 1999 - Oxford Health Plans, Inc.
(NASDAQ:OXHP) In response to multiple inquiries, Oxford Health Plans, Inc. today
announced its preliminary January membership results and government program
developments. Approximately one third of Oxford's commercial membership renews
in January. On a preliminary basis the Company now believes that its commercial
membership will be higher than expected, as it anticipates attrition of less
than 50,000 (net) members in the important January period in its tri-state (New
York, New Jersey, Connecticut) market. The membership which renewed in January
received an average premium increase of between nine and ten percent which is
slightly higher than targeted in the Company's turnaround plan.
"We are very pleased with these results," said Norman C. Payson, M.D.,
Oxford's chief executive officer. "An important element of our turnaround plan
was our ability to successfully renew our employer accounts at appropriate
pricing. This success is a tribute to the hard work of everyone at Oxford, and a
sign that Oxford stands as a leading choice among health plans in the New York
area."
Separately, the Company received approval from the Health Care
Financing Administration on January 6th to recommence marketing to and
enrollment of beneficiaries into
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its Medicare HMO program. The Company voluntarily suspended marketing and
enrollment of Medicare beneficiaries on June 10, 1998 as it focused on
restructuring the program and its operations.
The Company also announced that it has closed its previously announced
agreement with Managed Healthcare Systems ("MHS") wherein MHS assumed all of
Oxford's Medicaid business in New York City effective January 1, 1999. Oxford
received $13.5 million in consideration for providing MHS with its Brooklyn
Medicaid contract and the Medicaid portion of its Brooklyn physician contracts.
Dr. Payson commented further, "Although we have significant challenges
remaining, including operational improvements and sensitive provider network
arrangements, we have made important progress to date. The critical January core
commercial re-enrollment and rate renewals are ahead of plan. We have completed
our exit from underwriting risk in the volatile Medicaid program. Additionally,
we have finalized various provider arrangements that have been structured to
reduce our medical costs."
Commenting on the financial implications, Yon Yoon Jorden, Oxford's
chief financial officer, stated that, "Taking into consideration the success of
the January enrollment period, governmental business activities, coupled with
the implementation of certain medical cost containment initiatives, we now
believe that Oxford could be EBITDA (earnings before interest, tax, depreciation
and amortization) positive as early as the first quarter of 1999 (rather than
previous estimates indicating the third quarter of 1999), with the potential for
positive earnings in the second half of 1999."
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this press release, such as statements concerning the
final results of the January employer renewal process, future membership levels,
future of the company's government programs, future premium rates, future
network provider arrangements, future results of operations and the Company's
plan to return to profitability, 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
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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:
- - The Company's ability to develop processes and systems to support its
operations and to improve its service levels.
- - Changes in Federal or State regulation relating to health care and health
benefit plans.
- - Rising medical costs or higher utilization of medical services, including
higher out-of-network utilization under point of service plans.
- - Competition from health benefit plan providers and competitive pressure on
pricing Oxford products, including acceptance of premium rate increases by
the Company's commercial groups.
- - High administrative costs in operating the Company's business and the cost
and impact on service of changing technologies.
- - The ability of the Company to negotiate, complete and operationalize risk
transfer and other provider arrangements and to successfully dispose of
certain assets and businesses.
- - The effect, if any, of recent events at the Company (including any adverse
publicity) on future enrollment in the Company's health benefit plans.
- - Any changes in the Company's estimates of its medical costs and expected
cost trends as a result of information gained in the process of continuing
to reconcile delayed claims or claims paid or denied in error and to pay
down backlogged claims.
- - The impact of litigation (including purported class and derivative actions
filed against the Company and certain officers and directors and
proceedings commenced against the Company and several employees by certain
healthcare providers), regulatory proceedings and other governmental
action (including the ongoing examination, investigation and review of the
Company by various Federal and State authorities).
- - Those factors included in the discussion under the caption "Management's
Discussion and Analysis of the Financial Condition and Results of
Operations - Cautionary Statement Regarding Forward-Looking Statements" in
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998.
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