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Press release from CNW Group

OPMEDIC Group Inc. comments on the impact of a possible reduction in rates paid to physicians for services related to medically assisted procreation services in Quebec

Thursday, December 15, 2011

OPMEDIC Group Inc. comments on the impact of a possible reduction in rates paid to physicians for services related to medically assisted procreation services in Quebec09:55 EST Thursday, December 15, 2011/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./MONTREAL, Dec. 14, 2011 /CNW Telbec/ - OPMEDIC Group Inc. ("OPMEDIC GROUP") (TSX: OMG), a healthcare-related company in fertility, laboratories and surgeries providing services and facilities to patients and surgeons, has taken note of an unofficial statement from the president of the Fédération des médecins spécialistes du Québec ("FMSQ"), published yesterday in a daily newspaper, that the FMSQ has agreed with the Régie de l'assurance maladie du Québec (the "RAMQ") to reduce the rates paid to physicians who provide medically assisted procreation ("MAP") services in private clinics effective January 2012. To date, neither the RAMQ nor the Government of Quebec nor the FMSQ has issued an official communiqué confirming the rate decrease or its effective date.  The Corporation believes that if the planned decrease is confirmed, it may have a negative impact on revenues and profit margins for its in vitro fertilization ("IVF") activities in Quebec. However, according to an unofficial statement from an FMSQ spokesperson, the planned rate decrease would not affect other MAP rates covered by the FMSQ, such as artificial inseminations, ultrasounds and blood tests. The Corporation's diversification into MAP services could reduce the impact of the target decrease in IVF rates in MAP in Quebec.Further to the coming into force on August 5, 2010 of the Regulation respecting clinical activities related to assisted procreation and the Regulation amending the Regulation respecting the application of the Health Insurance Act (collectively, the "Regulation"), all expenses for MAP services that are covered by the Regulation are paid by the RAMQ to the attending physician. Rates include the professional services fees retained by the attending physician and the portion of the expenses for medical procedure and technical services remitted by the attending physician to the private clinic. The rates are established by the RAMQ after consultation with the FMSQ.When the free MAP program came into effect, the rates paid to the attending physician for the professional portion and technical portion were set at $7,100 per IVF cycle. According to the unofficial statement from the FMSQ and government spokespeople, it seems that the rates paid to the attending physician could be reduced by up to approximately 35% per IVF cycle, if this recommendation from the FMSQ and the RAMQ is confirmed. The impact of this reduction will not affect the attending physicians, who will continue to receive the same fees for their professional services, whether they provide their services in a hospital or a private clinic, but will reduce the technical portion of the expenses that were payable to the private clinic by the attending physician for all services provided by the private clinic. If the MAP services are provided in a hospital, no technical portion is payable to the attending physician because all expenses for the medical procedure and the technical services are covered by the budget of the hospital, which also assumes all infrastructure and capital costs.When the RAMQ, the government and the FMSQ confirm the reduction in rates paid to attending physicians who perform IVF in private clinics and the size and effective date of that reduction, the Corporation will analyze its impact and take all necessary measures to minimize the effects on revenues and earnings.Jean-Marc Lachance, Vice-President Finance and Chief Financial Officer of the Corporation, explains that "the impact on revenues could be tangible, but at this stage it is hard to assess with precision the consequences given that the free MAP program has yet to reach maturity and the Corporation can take measures to mitigate the impact of the expected decrease in fertility revenues by controlling costs and increasing the volume of MAP activities in its Québec City and Montreal facilities while pursuing its other laboratory, surgical and endoscopic activities, as shown from its expansion to Montreal's South Shore, where it opened in November a new endoscopic centre." Mr. Lachance stated that "the Corporation has a solid balance sheet and is constantly examining new projects outside Quebec in order to diversify its business geographically, as demonstrated by the opening in July of a new fertility clinic in the North of Toronto as part of a joint venture with physicians.""For close to 20 years now, we have invested in our facilities and the development of specialized services for the treatment of male and female infertility. PROCREA and its medical team have been pioneers in the field in Quebec, and we intend to continue by maintaining our patient services offering. This anticipated reduction in rates for IVF in Quebec does not affect our other activities and does not call into question our strategy of being a major player in the provision of medically assisted procreation treatments in Quebec," says Dr. Pierre St-Michel, President and Chief Executive Officer of Opmedic Group.Detailed financial results can be accessed on the OPMEDIC GROUP web site at OPMEDIC GROUPOPMEDIC GROUP is a company incorporated under the laws of the Province of Quebec which provides healthcare-related services including surgical and endoscopic facilities and services to patients and surgeons (with its OPMEDIC division), fertility treatments, medical imaging, laboratory services and diagnostic procedures (with its PROCREA Cliniques division) and sperm banking services (with its PROCREA Cryopreservation Centre subsidiary). OPMEDIC GROUP's Common Shares trade on the Toronto Stock Exchange under the symbol "OMG".This news release does not constitute an offer to sell or to solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful. This news release contains certain forward-looking statements that reflect the current views and/or expectations of OPMEDIC GROUP with respect to its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.The content of this press release has not been approved by nor submitted to the TSX which assumes no liability therefore.For further information: Jean-Marc LACHANCE Vice-President Finance and Chief Financial Officer (514) 345-8535, x 2260