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Prescription for debt – HMO salvages nonprofit status

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New England’s largest health maintenance organization says it will preserve its nonprofit status in spite of millions of dollars of debt, Reuters reports.

State Attorney General Tom Reilly told reporters that Harvard Pilgrim Health Care repaid more than $200 million of its debt in the last two months.

This leaves the struggling HMO with $150 million to be repaid by May.

Reilly said the debt will be paid without a takeover by a for-profit company, without acquiring new debt and without using taxpayer dollars.

He said the HMO has $200 million in cash and expects to receive an additional $70 million in capital. In addition, its real estate was recently appraised at $130 million.

Regulators took over the organization earlier this year after the HMO reported its 1999 losses would top $150 million

Harvard Pilgrim is expected to return to profitability by 2001, Reuters reports.

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