Priority Healthcare Resolves Contract Dispute

LAKE MARY, Fla., Dec. 13 /PRNewswire-FirstCall/ -- Priority Healthcare Corporation announced that it has resolved its previously disclosed dispute with one if its payor customers.

As disclosed in the company's July 3, 2004 and October 2, 2004 Form 10-Qs, a payor contacted the company claiming that one of the company's subsidiaries was not in compliance with certain provisions of the payor's contract going back to 1997. The payor demanded $8.6 million in overcharges and threatened to terminate that subsidiary's participation in the payor's network. The company has agreed to settle the dispute and pay a total of $4.2 million over a period of approximately one year. The company will be expensing the settlement and the related costs of the settlement as a one-time charge in the quarter ending January 1, 2005.

"We are pleased to have this dispute behind us, as we have had a strong relationship with this payor over the past several years," stated Steve Cosler, President and Chief Executive Officer. "We look forward to continuing a mutually beneficial relationship in the future."

About Priority Healthcare Corporation

Priority Healthcare Corporation is a national specialty pharmacy and distributor that provides biopharmaceuticals, complex therapies, and related disease treatment services. Priority Healthcare provides comprehensive programs for patients, payors, physicians, and pharmaceutical manufacturers for a growing number of disease states including cancer, hepatitis C, respiratory and pulmonary conditions, infertility, rheumatoid arthritis, hemophilia, multiple sclerosis, Parkinson's disease, and macular degeneration. Additional information regarding Priority Healthcare is available online at .

Certain statements included in this press release, which are not historical facts, are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent our expectations or beliefs and involve certain risks and uncertainties, including those described in our public filings with the United States Securities and Exchange Commission; also including, but not limited to, changes in interest rates, competitive pressures, changes in customer mix, changes in third party reimbursement rates, financial stability of major customers, changes in government regulations or the interpretation of these regulations, changes in supplier relationships, growth opportunities, cost savings, revenue enhancements, synergies and other benefits anticipated from acquisition transactions, difficulties relative to integrating acquired businesses, the accounting and tax treatment of acquisitions, and asserted and unasserted claims, which could cause actual results to differ from those in the forward-looking statements. The forward-looking statements by their nature involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date herein.

Photo: Archive: Photo Desk, photodesk@prnewswire.comPriority Healthcare Corporation

CONTACT: Stephen Saft, Chief Financial Officer of Priority HealthcareCorporation, +1-407-804-6700

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