Pediatric Prosthetics Reports Downward Reimbursement Trend

Kenneth Bean, vice president of Pediatric Prosthetics Inc., Houston, Texas, said there has been a recent downward trend in health insurance reimbursements for the company. "We founded Pediatric Prosthetics Inc. to better serve the children with a limb-loss across the country and build a strong national company on behalf of our shareholders. We have worked diligently for four years building the company into a viable national prosthetics provider with over 30 allied fitting facilities, Medicare and Medicaid approval, full SEC compliance, and just recently, completed the national ABC certification process," Bean said.

"As has become clear in just the last few days based upon reimbursement claims being processed since January 2008, the major health insurance companies have begun imposing unprecedented procedure caps on prosthetic services to children. These arbitrarily imposed caps or 'allowables' have impacted our operating margins, and in fact have put our entire business model under duress. On some claims submitted, our reimbursements have been cut over 40 percent below what we have historically seen."

Bean continued, "If the current trend in allowables continues and we are unable to raise additional capital on favorable terms, if at all, we could be forced to change our business plan and/or may be forced to cease our business operations."