A Medical Device Daily

PainCare Holdings (Orlando, Florida), a provider of pain-focused medical and surgical solutions and services, said it plans to make several changes, including reducing its headcount from 27 to 18, in an effort to cut monthly overhead by 30%, dropping from about $300,000 to $200,000.

The company said its president, Ronald Riewold, would resign at the end of the month. He will be replaced with Katie White, president of the company’s subsidiary, Integrated Pain Solutions (IPS; Orlando), who will also continue to lead IPS.

PainCare also said it has signed a forebearance agreement with its senior lender, and that the lender has agreed to make cash advances to PainCare for up to $1 million, payable through the end of March. All extensions of credit will be added to the principal balance of the term loans, which has been reduced to about $8.5 million from $30 million in association with the company’s restructuring efforts.

PainCare also reported plans to sell Dynamic Rehabilitation Centers (Troy, Michigan), and has hired Martins Acquisition Group to market the sale of Dynamic. PainCare acquired Dynamic, a spinal rehabilitation practice specializing in the treatment of sub-acute and chronic back and neck pain, in 2004 (Medical Device Daily, June 4, 2004).

In October 2006 PainCare reported plans to sell its interests in its ambulatory surgery centers (ASCs) as part of its financial restructuring (MDD, Oct. 20, 2006). The company said at the time the proceeds of the proposed sales would help reduce or retire its debt obligations, thus strengthening its balance sheet.

Randy Lubinsky, CEO of PainCare, said the ASCs had been complimentary to its overall business but not central to its mission.

Then, last year, PainCare sold PSHS Alpha Partners (Palm Beach County, Florida), which owns an ambulatory surgery center, ASC (Lake Worth, Florida), and The Gables Surgical Center (Coral Gables, Florida). The completed sales provided for the release of about $14.4 million in cash to PainCare that was held in escrow (MDD, Sept. 7, 2007).

The company said this week that it wants to continue looking for ways to strengthen its operating platform and provide financial resources to support the growth of IPS, a subsidiary it formed in 2006 to develop, administer and track the outcome of evidenced-based, clinical pathways for the management to acute or chronic pain (MDD, Oct. 27, 2006).

With two national contracts with major payor groups in place and three additional new contracts in various stages of negotiation, IPS continues to focus on the expansion of its provider network, with initial recruiting and credentialing emphasis in Florida, Tennessee, Texas and Pennsylvania, according to PainCare.

“The key to long term success for IPS,” White said, “relies on our ability to establish a national network of leading physicians and surgeons who share IPS’ mission of delivering higher quality, more efficient quality interventional pain treatment through utilization of our proven clinical pathways and the effective administration of patient-centric care and attention. As our physician network grows, IPS’ value proposition to both the patient and the payor is significantly enhanced, thus promoting much more dynamic and exponential revenue growth as we progress our business plan and expand the universe of patients we are contracted to serve.”