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OHP Plans $35M in ‘02 Spending on Info Systems
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Business New Haven
3/18/2002
By: BNH
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TRUMBULL - Capital spending for Oxford Health Plans Inc. (NASDAQ: OHP) will be around $35 million in 2002, according to a filing with the U.S. Securities & Exchange Commission (SEC). The funds will mainly go toward information systems.
The managed-care company reported $21.4 million in capital expenditures last year, up from $12.8 million in 2000. Of the 2001 figure, about $13.6 million went to payments under the company's computer outsourcing agreement.
Oxford entered the outsourcing pact with Computer Services Corp. in December 2000 and expects to pay about $195 million over the term of the agreement.
According to the filing, if Oxford terminates the agreement before expiration it will incur penalties of around “$15 million to $20 million in 2002, declining to approximately $8 million to $10 million in 2005, charges to write off equipment leased from CSC of approximately $7 million and additional costs to rehire staff and purchase equipment,” according to the SEC filing.
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