LV insurer cutting deeper into Texas operation

Thursday, June 29, 2000 | 11:26 a.m.

Sierra Health Services Inc. of Las Vegas said today it's likely to take a big charge against earnings because of problems in its Texas medical operations.

Sierra stock fell 1/2 to 3 9/16 this morning after it announced substantial charges and writedowns because of downsizing in Texas. These may include all or a portion of the $126 million of goodwill on Sierra's books from its Texas operations.

The non-cash charges will likely result in Sierra being out of compliance with bank ratios, forcing Sierra to have talks with its banks on amending its lending agreements.

Sierra said it's exiting the Medicare + Choice program in the Houston market and will discontinue operations at clinics in Irving, Mesquite, Plano and Arlington. Some 135 jobs will be cut at the clinics.

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