MAXICARE TO SHED PLANS IN 3 STATESPosted On: Aug. 9, 1998 12:00 AM CST
LOS ANGELES -- Maxicare Health Plans Inc., which reported a $19.8 million second-quarter loss last week, also said it has agreed to sell its Wisconsin operations to Managed Health Services Insurance Corp., a subsidiary of St. Louis-based Centene Corp.
The sale of the Wisconsin plan, which has about 14,850 members, is expected to close Sept. 30. The price of the sale was not disclosed.
In addition, Maxicare announced last week a "strategic disposition program" under which it also plans to shed its operations in Illinois and the Carolinas through sale or closure. The managed care company said the Wisconsin, Illinois and Carolinas plans reported combined losses of $7.6 million for the second quarter.
Maxicare's $19.8 million second quarter loss compares with a $4.2 million profit for 1997's second quarter. The loss includes a $10 million charge for divestiture costs, as well as $1.2 million in costs generated in connection with a shareholder consent action.
This relates to a settlement agreement Maxicare reached last month with dissident shareholder Paul R. Dupee Jr., under which the company agreed to reimburse him for certain expenses and elected him to its board of directors. Mr. Dupee and the company also dismissed litigation they had filed against one another.