Lifemasters files voluntary petition under Chapter 11 of the U.S. Bankruptcy Code

Sep 15 2009

LifeMasters Supported SelfCare, Inc. ("LifeMasters") today announced that it has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. LifeMasters' restructured operations are expected to be profitable and sufficient cash is on hand for the restructuring process.

"The Chapter 11 filing is the most efficient path for the company to restructure liabilities that are a result of Demonstration Projects previously performed under contracts with the Centers for Medicare and Medicaid Services (CMS), " said George D. Pillari, President of LifeMasters. Mr. Pillari, named President of LifeMasters today, is a Managing Director of Alvarez & Marsal Healthcare Industry Group, LLC and had been working with the company and its board as a restructuring advisor prior to the filing.

During the last four years, LifeMasters participated in three CMS Demonstration Projects aimed at testing certain disease-management techniques in fee-for-service Medicare and Medicare/Medicaid dually eligible populations. Eight other disease management, health insurance and pharmaceutical companies also participated in these projects. LifeMasters' involvement in the CMS projects ended earlier this year.

CMS contends that LifeMasters, like other participating organizations, was unable to demonstrate success based on CMS' study design and measurement methodologies. Similar to its claims against other Demonstration Project contractors, CMS contends that LifeMasters is required to repay to CMS any fees earned in excess of savings generated during the multi-year projects. "Rather than endure a costly and time-consuming legal path to challenge CMS, we have chosen to restructure our CMS and other liabilities through the Chapter 11 process," Mr. Pillari added.

LifeMasters expects no disruptions in its services to clients and believes it has ample cash on hand to emerge from Chapter 11 as a viable health improvement company.

In conjunction with this restructuring, the company also announced that Christobel Selecky is transitioning out of her longtime role as President and CEO. Ms. Selecky will remain on the LifeMasters board of directors and be retained by the company as Senior Advisor on a consulting basis. "Chris has been an important part of LifeMasters since its inception and we value her continued contributions to the business," Mr. Pillari said.