Thursday, February 28, 2002

SHARON HILL, Pa. - Legend Healthcare "is reviewing all its options" after losing what appears to be a devastating $15.4 million arbitration case with United Healthcare in January.

In a notice to its remaining provider members dated Jan. 31, Legend wrote:

"We have concluded our litigation with United Healthcare, and although we stood firm in our belief that United Healthcare owned Legend Healthcare and its providers $15.4 million, the decision of the arbitrators was in favor of United Healthcare.

At this time, the organization is reviewing all options in regards to the outcome of the litigation and the future of Legend Healthcare.

We will continue to keep you posted."

Legend Executive Vice President Phil Leone said the company is considering filing a "motion to vacate" the ruling. If the company won that motion, the case would go to appeals, and if Legend won that they'd return to arbitration.

Providers who worked with Legend and didn't get paid - sometimes tens of thousands of dollars - expressed little sympathy for its loss to United.

"When we were calling Legend, saying, 'Hey, where is our money?' Legend would say, 'United hasn't paid us yet,'" said a provider who formerly belonged to Legend's managed care network. "So then we started harassing United and they'd say, 'Hey, we paid these bills six months ago.'"

Legend relied on United for about 50% of its business, but severed the relationship a little over two years ago, claiming among other things that United was doing business with Legend members on the side and thus depriving Legend of revenue.

Since terminating its relationship with United, it's become nearly impossible to find providers who still do work with Legend, although as recently as last fall Leone said the company still held a number of managed care contracts.

Providers says Legend's problems have made them more cautious when dealing with managed care companies and networks.

"It makes you defensive, but that is life," said a former Legend member. "You've got to protect your assets. Now if I don't have a check in 90 days, we make a few phone calls. If they say the check's in the mail and I don't have it in two weeks, I'm canceling my contract. I'm not going into the hole $10,000 or $20,000 like I did." HME