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• Specialty Care Network (Lakewood, CO) said its HealthGrades.com formed an alliance with DrKoop.com. HealthGrades.com’s proprietary healthcare ratings information content will be featured and promoted on DrKoop.com and within its affiliate network. Also, Specialty Care attributed its lower revenue to restructured management agreements due to its change in focus to an Internet health company from a physician practice management company. The restructuring has reduced its debt by about $38.8 million.
• Tessa Complete Health Care (Oakbrook Terrace, IL) has acquired Family Chiropractic and Sports Injury Center (Zurich, IL). The clinic generated revenues of $350,000 during 1998. Dr. Joseph Younis will remain clinic director.
• Phycor (Nashville, TN) shares fell 9% in late July after it reported that its FY99 earnings would be lower than expected. The company attributed the shortfall on tougher reimbursement requirements, as well as its plans to sell the assets of certain clinics. The company expects earnings of 45 to 50 cents a share, compared to a First Call estimate of 55 cents per share.
• Physicians’ Specialty Corp. (Atlanta) reported its results for 2Q99 ended June 30 with revenues of $23.1 million, up 63% from 2Q98 revenues of $14.2 million. Net income increased 58% to $1.8 million, 19 cents per share, compared to 2Q98 net income of $1.1 million, 14 cents per share. As previously announced, the company has formed a merger agreement with a new company formed by TA Associates. Each outstanding share of Physicians’ stock, except those held by management and affiliated physicians, will be converted into the right to receive $10.50 per share in cash. The transaction is expected to close in 4Q99.
• MedPartners (Birmingham, AL) agreed July 10 to pay $56 million to settle 20 lawsuits by shareholders who said the company misled investors, reports the Wall Street Journal. Under the settlement, the company admitted no wrongdoing. Shareholders who bought stock beginning May 6, 1997, and still owned it Jan. 7, 1998, the day before the stock fell to $10, were to be repaid the difference between the purchase price and $10.40, reported the Journal.
• A Florida appellate court upheld a 1997 Florida Board of Medicine ruling that declared illegal a contract between PhyMatrix (West Palm Beach, FL) and a group of physicians in Brandon, FL. The contract required physicians to pay 30% of their net income, as well as a fee, to PhyMatrix in exchange for marketing, advertising, and other efforts to bring more patients to the practice. The court found that the contract violated a statute, which prohibits payments for patient referrals. PhyMatrix has exited the PPM business and now operates under the name Clinical Solutions (Providence, RI).