AMERICAN HEALTH CARE PROVIDERS ORDERED INTO LIQUIDATION

CHICAGO -- The Circuit Court of Cook County yesterday granted Illinois Insurance Director Nat Shapo's request for an Order of Liquidation with a finding of insolvency against American Health Care Providers, Inc. (AHCP), an Illinois domiciled health maintenance organization (HMO) located in Richton Park, IL. Shapo's petition was filed February 15, 2000, and alleged that the HMO was insolvent by approximately $25 million.

Since February 2, 2000, AHCP has been under an Order of Conservation which placed the company under the Director's control to preserve its records and assets for the benefit of its enrollees and creditors. The company will continue under the Director's control as Liquidator, for the purposes of marshaling the company's assets, identifying its creditors, and discharging its obligations.

Subject to statutory limitations, the Illinois HMO Guaranty Association will be responsible for the covered claims of all Illinois enrollees, up to $300,000 per person. The Association and the Liquidator will cooperate in an effort to ensure that services to enrollees are provided in accordance with the Association's powers and duties.

The Liquidation Order prohibits health care service providers (doctors, hospital, 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 services not covered by AHCP.

In addition, the Illinois HMO Act requires contracts between an HMO and a hospital to contain a clause that prohibits enrollees from being billed for outstanding claims unpaid by AHCP. Most of AHCP's non-hospital provider contracts contain a similar clause.

Director Shapo emphasized that any enrollee being directly billed by a provider or collection agency should contact a member of the Liquidator's staff on-site at American Health Care Providers at (708) 503-5000 or at the Liquidator's office at (312) 836-9500. Enrollees who have questions about whether their claims will be covered by the Guaranty Association should call the Association's Claims Office at (847) 940-1930.

AHCP provided 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. Enrollees in those states are not covered by a guaranty association. At December 31, 1999, AHCP reported approximately 90,000 enrollees.

The liquidation 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, Illinois 60654; (312) 836-9500.