PETITION FILED TO LIQUIDATE AMERICAN HEALTH CARE PROVIDERS

CHICAGO--Illinois Insurance Director Nathaniel S. Shapo announced today that he has petitioned the Circuit Court of Cook County for the liquidation of American Health Care Providers, Inc. (AHCP), an Illinois domiciled health maintenance organization. Shapo's petition was filed February 15, 2000, but was sequestered by Court order until today. The Director's complaint for liquidation alleges that AHCP is statutorily insolvent.

AHCP has been under a confidential order of conservation since February 2, 2000. The conservation order placed the company under the Director's control to preserve its records and assets for the benefit of its creditors, and to allow the Director's staff to more fully determine the current financial position of the company.

AHCP primarily provides coverage in Northern and Central Illinois to commercial groups, state and federal employees, Illinois Department of Public Aid enrollees, and federal Medicare HMO enrollees. The HMO also wrote some business in Indiana and Arkansas. At December 31, 1999, the company reported approximately 90,000 enrollees. American Health Care Providers was originally incorporated and licensed in 1984 as American HMO. The company is a subsidiary of the First American Group of Companies Inc., an Illinois holding company located in Richton Park, IL.

Should liquidation be granted, the Illinois Health Maintenance Organization Guaranty Association will pay the eligible claims of AHCP enrollees who reside in Illinois, subject to a statutory limitation of $300,000. The Illinois HMO Guaranty Association was statutorily created in July 1987 to protect Illinois residents enrolled in an HMO which becomes financially impaired or insolvent and unable to meet its contractual obligations.

Until the Illinois HMO Guaranty Association makes a final determination of its liability to the company's providers or until further order of the court, the existing conservation order, as well as any liquidation order that may be issued, prohibits all providers (doctors, hospitals, clinics, etc.) from seeking to recover directly from any enrollee any amount owed by AHCP. Enrollees are, however, responsible for applicable co-payments or deductibles for covered services, as well as fees for service not covered by AHCP. In addition, the Illinois HMO Act requires contracts between an HMO and a hospital to contain a clause to prohibit enrollees from being billed for outstanding claims unpaid by AHCP.

Director Shapo said that any enrollee being directly billed by a provider or collection agency should contact a member of the conservator's staff on site at American at (708) 503-5000.

The receivership proceedings are being handled on behalf of the Director of Insurance by the Office of the Special Deputy Receiver, 222 Merchandise Mart Plaza, Suite 1450, Chicago, IL 60654; (312) 836-9500.