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CML Healthcare Announces New Funding Agreement for Lab Services
CML Healthcare Announces New Funding Agreement for Lab Services.
About this update from Christina Lake Cannabis Corp
[{"type":"text","content":"\n\n\n\n\nMISSISSAUGA, ON, April 6 /CNW/ - CML Healthcare Inc. and CML Healthcare\nIncome Fund (the \"Fund\"), (TSX: CLC.UN), today announced that the Ontario\nAssociation of Medical Laboratories (\"OAML\") has entered into a new three-year\nfunding agreement (the \"Agreement\") with the Ontario Ministry of Health and\nLong-Term Care (\"MOH\"). Under terms of the Agreement, which is retroactive to\nApril 1, 2005, the MOH will increase the provincial payment cap for laboratory\nservices to OAML members by 2% per annum for the term of the Agreement. The\nresulting base funding cap for laboratory services will be $559.6 million for\nthe year ending March 31, 2006 (an increase of $11.0 million compared to the\nfiscal 2005 funding cap), $570.8 million for the year ending March 31, 2007\n(an increase of $11.2 million), and $582.2 million for the year ending \nMarch 31, 2008 (an increase of $11.4 million). CML Healthcare, which currently\nholds approximately 30.6% of the community-based Ontario laboratory testing\nmarket, will receive its proportional share of these increases.\nThe Agreement also includes additional one-time funding provided certain\nconditions are met by the industry. This additional funding, to a maximum of\n0.8% of the provincial payment cap in the first year ($4.6 million) and an\nadditional 2% in each of the next two years ($15.9 million in 2006/2007 and\n$26.9 million in 2007/2008), would be paid, if earned, annually to OAML\nmembers according to their respective proportional shares of the provincial\npayment cap, as part of the MOH year-end reconciliation process. Additional\nfunding earned in the third year of the Agreement will be added to the\nprovincial payment cap at the end of the three year term.\nDue to the retroactive nature of the Agreement, CML Healthcare will\nrecognize approximately $2.5 million in unrecorded cap revenue in its fiscal\n2006 first quarter financial results, representing the 2% cap increase from\nApril 1, 2005 to December 31, 2005. CML Healthcare's proportional share of the\nadditional funding, if the conditions are met, will be recognized in its\nfiscal 2006 year end results.\nThis Agreement ensures funding stability to the community laboratory\nsector while at the same time meeting the MOH need to continue with capped\nfunding for the provision of community laboratory services.\n\nA...