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NEWS RELEASE [Coastal Physician Group, Inc. Logo]
FOR IMMEDIATE RELEASE CONTACT: Robert P. Borchert
Coastal Physician Group, Inc.
919-383-0355
COASTAL PHYSICIAN GROUP SIGNS LETTER OF INTENT TO SELL
ITS NEW JERSEY CLINIC OPERATIONS TO THE VALLEY HOSPITAL
-- COASTAL COMPLETES SALE OF MARYLAND CLINICS TO HELIXCARE --
DURHAM, NC, SEPTEMBER 25, 1996 -- Coastal Physician Group, Inc.
(NYSE: DR) announced that it has signed a letter of intent to
sell certain assets of HealthNet, its New Jersey-based clinic
operations, to the Valley Care Corporation, the parent of The
Valley Hospital. HealthNet employs 32 physicians at the
group's nine primary care sites in New York and New Jersey.
The Valley Hospital, based in Ridgewood, New Jersey, is a
421-bed acute care facility serving the residents of northern
New Jersey.
The proposed transaction is a cash sale, the net proceeds of
which would be used primarily to reduce bank indebtedness. The
proposed transaction is subject to the execution of a defini-
tive agreement as well as board and other approvals, and should
close before the end of October. Specific terms of the pro-
posed transaction were not disclosed.
Separately, Coastal completed the sale of certain assets of
Physicians Planning Group, Inc. (PPG), the Company's Maryland
capitated clinic operations, to HelixCare. PPG has 35 primary
care physicians specializing in family practice, internal
medicine and pediatrics at the group's six locations throughout
the Baltimore region. As was previously announced, Coastal
realized approximately $17 million in net cash proceeds on a
pre-tax basis, which will be used primarily to reduce bank
indebtedness.
"These assets have been separate, non-integrated subsidiaries
of Coastal, but are clearly attractive businesses to strategic
buyers such as Valley and HelixCare," said Joseph G. Piemont,
Coastal Physician Group's President and Chief Executive
Officer. "If consummated, these transactions should put us
more than 60 percent of the way toward meeting our $40 million
debt obligation due in January 1997, and are further indication
that we are successfully executing our plan."
Coastal Physician Group, Inc. is a diversified physician man-
agement company providing a broad range of health care and
administrative services to physicians, hospitals, employers,
managed care programs and other health care providers.
# # #<PAGE>
[Coastal Physician Group, Inc. Logo]
SEPTEMBER 25, 1996
NEWS FLASH
A BRIEF REVIEW OF DIVISION OR SUBSIDIARY ACCOMPLISHMENTS
AND ACTIVITIES INTENDED TO COMMUNICATE RECENT EVENTS
TO ALL EMPLOYEES AT COASTAL PHYSICIAN GROUP, INC.
====================================================
. COASTAL PHYSICIAN SERVICES (CPS) announced that its
Accounts Receivable Department, in conjunction with its
vice presidents, have produced record cash collections in
excess of projections. In the last week of August, CPS
had record collections in excess of $4.3 million.
. CPS received approval for funds to upgrade its Local Area
Network (LAN) and Wide Area Network (WAN) and to roll out
a division-wide electronic mail system. Within the Durham
campus, the upgrade is expected to be completed by year-
end, with the expectation of completing the revisions
throughout CPS by March 1997.
. During the American College of Emergency Physicians (ACEP)
Conference in New Orleans, CPS had three posters accepted
for presentation at the Scientific Assembly of Emergency
Physicians. The posters were: ED Utilization Profile for
115 Hospitals Classified by Acuity of Presentation; Emer-
gency Department Patient Turnaround Time as a Function of
Volume and Demographics; and Volume and Acuity as a Func-
tion of Seasonality, Myth or Reality. The posters were
developed by TROY BUESCHER and NATHANIEL BIGGERS.
. HEALTHCARE BUSINESS RESOURCES (HBR) continues to exceed
expectations with $9.6 million having been released from
enrollment holds in the last six weeks, with its aggres-
sive effort to regionalize enrollment now in place in all
HBR locations.
. HBR's Dallas office eliminated about 10,000 hours of back-
logged work before September 30. Congratulations to
everyone involved in these tremendous results and thanks
for your positive attitude and hard work!
. DOCTORS HEALTH PLAN has already more than doubled its mem-
bership in 1996, from approximately 4,000 enrollees at
January 1 to over 8,000 today, and is looking to reach
10,000 members by year-end. The Health Plan has several
of the largest employers in the Triangle region committed
to offering DOCTORS HEALTH PLAN to their employees for a
January 1, 1997 effective date. Importantly, our Health
Plan has one of the best and most complete provider net-
works in North Carolina, with over 3,000 physicians and 38
hospitals on board.
. Coastal Physician Group, Inc. announced that it has com-
pleted the sale of its Maryland capitated clinic opera-
tions, PHYSICIANS PLANNING GROUP, INC. (PPG), to
HelixCare, an affiliate of Helix Health Inc., the largest
integrated health care delivery system in the state of
Maryland. Coastal realized approximately $17 million in
net cash proceeds which will be used primarily to reduce
bank indebtedness. The Company also signed a letter of
intent to sell HEALTHNET to The Valley Hospital, a 421-bed
acute care facility serving the residents of northern
New Jersey. These transactions, when consummated, should
put Coastal more than 60 percent of the way toward meeting
the Company's $40 million debt obligation due in January
1997.<PAGE>
-2-
PEOPLE IN THE NEWS...
. PAUL SEWARD, M.D. was selected to be CPS's new Chief
Medical Officer effective September 15. Dr. Seward's
first course of business is to assemble all corporate
medical officers in Durham on October 4-5 to re-establish
goals and objectives for the new and expanded role of the
CPS Medical Officer positions.
. CINDY MAIER, MARSHA COLLINS and SYLVIA WITTING became
three of the first Certified Professional Credentialling
Specialists through their successful completion of the
National Association of Medical Staff Services certifica-
tion examination. The CPCS examination measured their
knowledge of credentialling, legal, and national accredi-
tation issues.
. ED GAINES was promoted to Senior Vice President in charge
of all compliance and internal audit issues in addition to
his continuing supervision of the human resources and
legal departments at HBR.
. GARY WHITAKER, M.D. has been appointed DOCTORS HEALTH
PLAN's new President, replacing Rich Felice, who resigned
in early September.
TO ALL EMPLOYEES...
. On Thursday, September 19, INSTITUTIONAL SHAREHOLDER
SERVICES, INC. (ISS) recommended that its clients vote for
Coastal management at the Company's Annual Meeting. ISS
is the leading independent advisor to several hundred
institutional investors in the areas of proxy contests,
corporate governance and other shareholder-related issues.
ISS published a report which stated: "We believe the
strategic plan set forth by management is necessary to
maintain Coastal as a viable entity given the company's
financial position." ISS goes on to say, "...we believe
the sale of assets is necessary to service the impending
debt payment, and the fortification of the company's core
assets will benefit the company in the long run ... Be-
cause management is open to the possibility of a sale of
the entire company, we believe that its strategy ... will
help the company avoid default on its debt obligations and
enhance the position of Coastal."
. Coastal management believes it is IMPORTANT FOR EVERY
SHAREHOLDER TO EXERCISE THEIR INDEPENDENT RIGHT TO VOTE.
Both Coastal Physician Group, Inc. and Dr. Steven Scott
have sent information all shareholders for voting purposes
prior to the ANNUAL MEETING OF SHAREHOLDERS SCHEDULED FOR
THIS FRIDAY, SEPTEMBER 27 AT THE SHERATON IMPERIAL IN
RESEARCH TRIANGLE PARK (PAGE ROAD OF I-40). Since Dr.
Scott is as an owner of 30% of the shares, EVERY VOTE FOR
COASTAL MANAGEMENT COUNTS! By not voting, you only reduce
the total number of voted shares needed to win the proxy
contest, which would help Dr. Scott. If you wish to sup-
port Coastal management and our current turnaround plan,
PLEASE VOTE THE WHITE PROXY CARD. An abstention vote on a
BLUE card will not help Coastal management, and would can-
cel your previous vote since the last card voted is what
counts! If you have any questions, please contact Robert
Borchert at 1-800-476-4587, extensions 4176 or 4253.
To submit ideas for inclusion in an upcoming NEWS FLASH,
please speak with your manager or contact
Coastal Corporate Communications directly at
1-800-476-4587, extensions 4176 or 4253.
