US Oncology Reports First Quarter 20...(d other amounts owed by the practice on ...),Health

Date:5/7/2008

d other amounts owed by the practice on a timely basis. At March 31, 2008, the total amount owed to us for those receivables of $22.5 million is reflected on our balance sheet as other assets. We intend to pursue the claims we incurred as a result of terminating this service agreement. We also intend to defend against the practice's allegations that we breached the agreement and that the agreement is unenforceable. As with any complex litigation, the process necessary to resolve this claim may take several years.

During March 2007, the Company became aware that it and one of its affiliated practices are the subject of allegations that the practice may have engaged in activities that violate the Federal False Claims Act. These allegations are contained in a qui tam complaint, commonly referred to as a "whistle-blower" lawsuit. The details of this suit are not publicly available or disclosable at the current time since qui tam complaints are filed on a confidential basis with a United States federal court. The DOJ has not made a decision on the merits of the whistle-blower's claim. The Company intends to continue to investigate and vigorously defend itself against this claim. Based upon its present understanding of the nature and scope of the claim and investigation, the Company does not expect this claim to have a material adverse effect on its operations or financial condition, however our expectation could change as we receive more information.

On July 30, 2007, CMS issued a national coverage decision ("NCD") establishing criteria for reimbursement by Medicare for ESA usage which is expected to continue to lead to a significant decline in utilization of these drugs by oncologists, including those affiliated with US Oncology. The Oncology Drug Advisory Committee of the FDA ("ODAC") met on March 13, 2008, to further consider the use of ESAs in oncology. While ODAC recommended keeping chemotherapy-induced anemia as a labeled indication for ESAs, the Comm
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SOURCE US Oncology Holdings, Inc. Copyright©2008 PR Newswire. All rights reserved

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