-- Oxford to Rehire IS Staff --
TRUMBULL, Conn., April 29 /PRNewswire-FirstCall/ -- Oxford Health Plans,
Inc. (NYSE: OHP) announced today that it has agreed with Computer Sciences
Corporation (NYSE: CSC) to conclude their technology outsourcing arrangement.
The original arrangement was limited to data center operations, help desk
services, desktop systems and network operations. Oxford will assume these
previously outsourced technology functions. CSC and Oxford have agreed to
cooperate in an orderly transition of these functions back to Oxford.
Oxford had retained many of the IS functions it viewed as important to its
core businesses, including application development and maintenance, quality
assurance, program management and architecture. Shifting the CSC functions
back to Oxford will not involve transferring any operating systems to new
platforms because all systems remained at the company's headquarters. "We
believe that fully integrating the entire function will allow us to deploy
technology solutions in a more flexible, timely and cost-effective manner to
meet our business goals," said Charles Berg, president and chief operating
officer of Oxford.
"At the time we made the decision to outsource a portion of our IS
functions, Oxford's systems and operations were stable and supporting our
market-leading service to providers, customers and members. Our systems
continue to perform well," said Berg.
A significant number of former Oxford employees who transferred to CSC as
a result of the November 2000 outsourcing arrangement are still located at
Oxford's facilities and it is anticipated that they will return to Oxford,
according to Berg.
Oxford and CSC are currently discussing the financial arrangements
associated with ending the outsource arrangement. The financial issues being
addressed include the repurchase or lease of assets held by CSC for use by
Oxford and the obligation, if any, of Oxford to pay a termination fee. Oxford
may experience a one-time charge in connection with these financial issues,
but believes this charge, if any, would not exceed $10 million.
Founded in 1984, Oxford Health Plans, Inc. (http://www.oxfordhealth.com)
provides health plans to employers and individuals in New York, New Jersey and
Connecticut, through its direct sales force, independent insurance agents and
brokers. Oxford's services include traditional health maintenance
organizations (HMOs), point-of-service (POS) plans, preferred provider
organization (PPO) plans, third-party administration of employer-funded
benefits and Medicare plans.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release concerning the effect of the end
of the information technology outsourcing agreement with Computer Sciences
Corporation, the integration of the Company's IT functions, the rehiring of
employees, and the amount of any one-time charge, and other statements
contained herein regarding matters that are not historical facts, are
forward-looking statements as defined in the Securities Exchange Act of 1934;
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:
* Changes in Federal or State regulation relating to health care and
health benefit plans, including proposed patient protection legislation
and mandated benefits.
* The state of the economy.
* The impact of the September 11, 2001 terrorist attacks, subsequent
cases of anthrax infection or exposure, and any future acts of
terrorism or war.
* Rising medical costs or higher utilization of medical services,
including higher out-of-network utilization under point-of-service
plans and new drugs and technologies.
* Competitive pressure on the pricing of the Company's products,
including acceptance of premium rate increases by the Company's
commercial groups.
* Higher than expected administrative costs in operating the Company's
business and the cost and impact on service of changing technologies.
* The ability of the Company to maintain risk transfer and other provider
arrangements and the resolution of existing and future disputes over
the reconciliations and performance under such arrangements.
* Any changes in the Company's estimates of its medical costs and
expected cost trends.
* The impact of future developments in various litigation (including
pending class and derivative actions filed against the Company and
certain of its officers and directors, and other proceedings commenced
against the Company and several employees by certain healthcare
providers), class actions in Connecticut and New York and related
litigation by the Connecticut Attorney General, regulatory proceedings
and other governmental action (including the ongoing examination,
investigation and review of the Company by various Federal and State
authorities).
* The Company's ability to renew existing members and attract new
members.
* The Company's ability to develop processes and systems to support its
operations and any future growth and administer new health care benefit
designs.
* Those factors included in the discussion under the caption "Business -
Cautionary Statement Regarding Forward-Looking Statements" in the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2001.
SOURCE Oxford Health Plans, Inc.
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Related links:
http://www.oxfordhealth.com
Company News On-Call:
http://www.prnewswire.com/comp/104612.html
CONTACT:
Maria Gordon Shydlo, +1-203-459-7674,
mshydlo@oxfordhealth.com, or Deborah Abraham, +1-203-459-6674,
dabraham@oxfordhealth.com, or Gary Frazier, +1-203-459-7331,
gfrazier@oxfordhealth.com, all of Oxford Health Plans
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