Just a year ago, Oxford was the darling of the industry with more than 2 million members and a stock price of $80 a share. Wednesday, it closed at 7 1/2.
Oxford prided itself on offering members access to top-tier doctors and services. However, the price was often too high.
"Some claims were delayed from December of '96 that weren't paid as of a few months ago," said Dr. Elizabeth Almeyda, a plastic surgeon who is among the New York physicians that have filed suit.
The challenge now is for Oxford to hang on to its top-tier physicians.
Dr. Margaret Lewin bailed out of Oxford last year after delays in payment became too much to bear.
"My overhead went way up, my income came screeching to a halt, and of course, people couldn't get into the phone lines because they were being tied up by collectors and I just didn't have the staff to handle it," she said.
In a published open letter to physicians, patients and employers Wednesday, Oxford sounded upbeat about a recovery plan that would lead to profitability. However, in a letter sent a month ago to doctors, Oxford said the company would have to swallow some tough medicine to survive.
"They plan to decrease payments to the doctors," said Dr. Elizabeth Almeyda. "They plan to start making networks more restrictive to patients, and that is an unfortunate thing."
Oxford experienced unprecedented growth with its policy of premium healthcare for HMO prices. However, the formula didn't work and now Oxford faces the very real possibility of either pricing itself out of the market, or becoming just another HMO.
Reported by John Roberts
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