Affidavit: Company faces Indian tax hit, 'cannot endure a prolonged stay in chapter 11'
An affidavit filed in conjunction with Spheris' bankruptcy filing today sheds some light on what's been happening behind the scenes at the troubled medical transcription company, which has found potential buyers.
In the filing, Robert Butler, who has been working with Spheris since November, details "the Debtors' liquidity difficulties" and "eroding financial performance" that led it to skip an interest payment and a likely violation of some covenants of its senior credit agreement.
Accordingly, the company hired investment banking firm Jefferies & Co. to pursue the sale of its assets. Jefferies pitched more than 45 potential buyers, but the joint deal bid of CBay Inc. and MedQuist was judged to be the best offer.
Other interesting tidbits from the affidavit include:
"Competitors have been casting doubts on the company's viability" to its largest clients, who are likely to jump ship should Spheris' restructuring take a while.
Spheris employs about 4,200 medical transcriptionists worldwide, with its Indian operations providing about 35 percent of its services to customers.
The company is expecting a $2 million bill from India's tax authorities soon that, if not "satisfied immediately," could result in the Indian government shuttering its operations there."If Spheris India were to cease operating for even a couple of days, the result would be disastrous" to the company as a whole, Butler said. His team is seeking the court's permission to pay the taxes from its U.S. bank accounts.
Spheris "cannot endure a prolonged stay in chapter 11" without "significant risk" to its survival and its proposed debtor-in-possession lenders are unwilling to back a drawn-out process.
The company's four executives have employment agreements, with each earning an average annual salary of $210,000 excluding bonuses and other incentive compensation.
Its two-week payroll bill comes to $2.7 million.
As of Jan. 31, the company had about $75.6 million in pre-petition loans outstanding, including interest. Its senior credit agreement dates to July 2007.
It owes another $133.6 million on the bonds it issued in 2004. Those bonds (Ticker: SPYS.GB) fell to $17 from $48 this afternoon and now yield more than 110 percent. They were issued in the spring of 2006 with an interest rate of 11 percent.
As of Dec. 31, the company estimates it had $115 million in federal tax net operating loss carryforwards, a "valuable" asset that could be used to offset future profits. As of June 30 of last year, that number was $104 million.
Monday, February 8, 2010
PeaceHealth to lay off 38 medical transcriptionists in Whatcom region
BELLINGHAM - PeaceHealth will lay off 38 medical transcriptionists in its Whatcom region and shift the work to two U.S. companies - a move that will occur in two waves beginning Feb. 18.
The employees, who provide transcription services for St. Joseph Hospital and PeaceHealth Medical Group in Bellingham, were told Wednesday, Jan. 20.
"When I opened the meeting, I just wanted to thank them," said Dale Zender, PeaceHealth's regional chief financial officer and the vice president of finance.
"It's a really tough time. We have to acknowledge all the years of service that so many of them provided," Zender added.
About half of the local positions will be cut next month as the medical group's transcriptions are outsourced first. Those workers' last day on the job will be Feb. 17.
The services provided for the hospital will be cut starting early next year, PeaceHealth representatives said.
When completed, the cut is expected to save PeaceHealth about $500,000 annually.
PeaceHealth representatives said outsourcing the work to companies that specialize in medical transcription is more efficient, is in line with what the organization has done in its other operations in Oregon, Washington state and Alaska, and is part of a system-wide standardization.
Superior Global Solutions, out of Plano, Texas, and Transcend Services Inc., based in Atlanta, Ga., will handle the new transcription work.
PeaceHealth representatives said they have specified that the new transcription be kept on U.S. soil even though it's more expensive to do so, rather than sending it offshore to foreign work centers.
About 8 percent of the Whatcom region's medical transcription services are being done in Sri Lanka, but PeaceHealth stressed that the new work will remain domestic.
Medical transcriptionists edit and create final reports based on the dictation of doctors and other health care providers. The original dictation is turned into a draft via speech-recognition software, with results that are correct about 90 percent of the time.
Transcriptionists then look at the draft, listen to the dictation and fix anything that's incorrect.
Laid-off workers can choose a severance package, which will provide a minimum of four weeks' pay and three months' benefits, more if they have worked for PeaceHealth longer.
They also could continue working at PeaceHealth for up to six months in what is called the Project Pool, at their current rate of pay and benefits, as they look for a job elsewhere in PeaceHealth.
Affected employees also can apply for work with Superior and Transcend, which could allow them to work locally.
A work fair will be held at the Main Campus for that purpose, though PeaceHealth said the companies don't have a contractual obligation to hire the laid-off employees.
"I think that they would hire as many as they could," said Peter Krautwald, PeaceHealth's regional director of Health Information Management. "They're (affected workers) familiar with a lot of the physicians already."
The employees, who provide transcription services for St. Joseph Hospital and PeaceHealth Medical Group in Bellingham, were told Wednesday, Jan. 20.
"When I opened the meeting, I just wanted to thank them," said Dale Zender, PeaceHealth's regional chief financial officer and the vice president of finance.
"It's a really tough time. We have to acknowledge all the years of service that so many of them provided," Zender added.
About half of the local positions will be cut next month as the medical group's transcriptions are outsourced first. Those workers' last day on the job will be Feb. 17.
The services provided for the hospital will be cut starting early next year, PeaceHealth representatives said.
When completed, the cut is expected to save PeaceHealth about $500,000 annually.
PeaceHealth representatives said outsourcing the work to companies that specialize in medical transcription is more efficient, is in line with what the organization has done in its other operations in Oregon, Washington state and Alaska, and is part of a system-wide standardization.
Superior Global Solutions, out of Plano, Texas, and Transcend Services Inc., based in Atlanta, Ga., will handle the new transcription work.
PeaceHealth representatives said they have specified that the new transcription be kept on U.S. soil even though it's more expensive to do so, rather than sending it offshore to foreign work centers.
About 8 percent of the Whatcom region's medical transcription services are being done in Sri Lanka, but PeaceHealth stressed that the new work will remain domestic.
Medical transcriptionists edit and create final reports based on the dictation of doctors and other health care providers. The original dictation is turned into a draft via speech-recognition software, with results that are correct about 90 percent of the time.
Transcriptionists then look at the draft, listen to the dictation and fix anything that's incorrect.
Laid-off workers can choose a severance package, which will provide a minimum of four weeks' pay and three months' benefits, more if they have worked for PeaceHealth longer.
They also could continue working at PeaceHealth for up to six months in what is called the Project Pool, at their current rate of pay and benefits, as they look for a job elsewhere in PeaceHealth.
Affected employees also can apply for work with Superior and Transcend, which could allow them to work locally.
A work fair will be held at the Main Campus for that purpose, though PeaceHealth said the companies don't have a contractual obligation to hire the laid-off employees.
"I think that they would hire as many as they could," said Peter Krautwald, PeaceHealth's regional director of Health Information Management. "They're (affected workers) familiar with a lot of the physicians already."
Axolotl Corp. Successfully Completes Interoperability Testing at Annual Integrating the Healthcare Enterprise (IHE) Connectathon
SAN JOSE, Calif. Axolotl Corp., the nationwide leader in health information exchange (HIE) solutions and services, today announced that it successfully passed testing at the Integrating the Healthcare Enterprise (IHE) North American Connectathon event in Chicago.
The annual IHE Connectathon promotes the adoption of IHE standards-based interoperability systems in commercially available healthcare IT systems. The Connectathon serves as an industry-wide testing event where participants can test their implementations with those of other vendors.
During the Connectathon, systems exchange information with complementary systems from multiple vendors, performing all of the transactions required for the roles they have selected, called IHE Actors, in support of defined clinical use cases, called IHE Profiles. Axolotl successfully demonstrated interoperability with 20 other healthcare IT vendors. These IHE profiles represent the foundation of Axolotl's interoperability services.
For more than a decade, Axolotl’s advanced interoperability services have enabled physicians, hospitals, payers, labs, imaging centers — entire communities to securely communicate, collaborate and share clinical information, greatly improving the timeliness and safety of patient care. By bringing together information from all of the disparate systems of these diverse stakeholders, Axolotl seamlessly provides unprecedented clinical information exchange for its users.
Axolotl completed Connectathon testing for the following IHE actors in one or more IHE integration profiles.
XDS.b Document Registry (Cross-Enterprise Clinical Documents Share profile);
XDS.b Document Repository (Cross-Enterprise Clinical Documents Share profile);
PIXv3 Patient Identity Cross-reference Manager (Patient Identifier Cross-Reference HL7 V3 profile);
PDQv3 Patient Demographics Supplier (Patient Demographic Query HL7 V3 profile).
“Axolotl is committed to interoperability solutions that are based on industry standards. Our longstanding involvement with IHE and other standards bodies gives Axolotl industry-leading competencies in developing the standards-based solutions that help solve our customers' interoperability challenges,” said Glenn Keet, President of Axolotl. “We are thrilled to once again have completed and demonstrated our best of class solutions at the Connectathon.”
Additionally, Axolotl’s advanced interoperability services will be demonstrated at the Interoperability Showcase at the Annual Healthcare Information and Management Systems Society (HIMSS) Conference & Exhibition, March 1–4 in Atlanta.
About Axolotl Corp
Founded in 1995, Axolotl Corp. is North America’s leading provider of browser-based products and services for secure health information exchange and management. Its award-winning Elysium® Exchange suite of solutions enables health care providers to instantly share information, reduce costs, and improve quality and efficiency.
Elysium helps thousands of health care entities—including hospitals, health systems, regional health information organizations (RHIOs/HIEs), clinics, laboratories, radiology centers and physician practices—to securely exchange clinical information for more than 25 million patients. Elysium’s community-wide Master Patient Index, EdgeServer(s), Interoperability Hub (I-Hub), Community Virtual Health Record (VHR), and certified ambulatory EMR with integrated e-Prescribing are all provided as a software service (SaaS). Axolotl-employed U.S.-based transcriptionists, combined with an integrated NLP engine, provide high-quality medical transcription services for acute and ambulatory care environments connected to Elysium HIEs.
Axolotl is based in San Jose and best known for introducing Clinical Messaging®, now at the heart of all health information exchange. For more information about Axolotl, see www.axolotl.com.
The annual IHE Connectathon promotes the adoption of IHE standards-based interoperability systems in commercially available healthcare IT systems. The Connectathon serves as an industry-wide testing event where participants can test their implementations with those of other vendors.
During the Connectathon, systems exchange information with complementary systems from multiple vendors, performing all of the transactions required for the roles they have selected, called IHE Actors, in support of defined clinical use cases, called IHE Profiles. Axolotl successfully demonstrated interoperability with 20 other healthcare IT vendors. These IHE profiles represent the foundation of Axolotl's interoperability services.
For more than a decade, Axolotl’s advanced interoperability services have enabled physicians, hospitals, payers, labs, imaging centers — entire communities to securely communicate, collaborate and share clinical information, greatly improving the timeliness and safety of patient care. By bringing together information from all of the disparate systems of these diverse stakeholders, Axolotl seamlessly provides unprecedented clinical information exchange for its users.
Axolotl completed Connectathon testing for the following IHE actors in one or more IHE integration profiles.
XDS.b Document Registry (Cross-Enterprise Clinical Documents Share profile);
XDS.b Document Repository (Cross-Enterprise Clinical Documents Share profile);
PIXv3 Patient Identity Cross-reference Manager (Patient Identifier Cross-Reference HL7 V3 profile);
PDQv3 Patient Demographics Supplier (Patient Demographic Query HL7 V3 profile).
“Axolotl is committed to interoperability solutions that are based on industry standards. Our longstanding involvement with IHE and other standards bodies gives Axolotl industry-leading competencies in developing the standards-based solutions that help solve our customers' interoperability challenges,” said Glenn Keet, President of Axolotl. “We are thrilled to once again have completed and demonstrated our best of class solutions at the Connectathon.”
Additionally, Axolotl’s advanced interoperability services will be demonstrated at the Interoperability Showcase at the Annual Healthcare Information and Management Systems Society (HIMSS) Conference & Exhibition, March 1–4 in Atlanta.
About Axolotl Corp
Founded in 1995, Axolotl Corp. is North America’s leading provider of browser-based products and services for secure health information exchange and management. Its award-winning Elysium® Exchange suite of solutions enables health care providers to instantly share information, reduce costs, and improve quality and efficiency.
Elysium helps thousands of health care entities—including hospitals, health systems, regional health information organizations (RHIOs/HIEs), clinics, laboratories, radiology centers and physician practices—to securely exchange clinical information for more than 25 million patients. Elysium’s community-wide Master Patient Index, EdgeServer(s), Interoperability Hub (I-Hub), Community Virtual Health Record (VHR), and certified ambulatory EMR with integrated e-Prescribing are all provided as a software service (SaaS). Axolotl-employed U.S.-based transcriptionists, combined with an integrated NLP engine, provide high-quality medical transcription services for acute and ambulatory care environments connected to Elysium HIEs.
Axolotl is based in San Jose and best known for introducing Clinical Messaging®, now at the heart of all health information exchange. For more information about Axolotl, see www.axolotl.com.
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