Matria sues National Women's Health Network.

ATLANTA--(BUSINESS WIRE)--Jan. 28, 1997--Matria Healthcare, Inc. (NASDAQ: MATR) announced today that it has filed suit against the National Women's Health Network (NWHN) based in Washington, D.C.

The suit charges that NWHN has issued false and misleading statements regarding Matria and its services, which tortiously interfered with Matria's ability to do business. According to Parker H. (Pete) Petit, Chairman of the Board of Matria, and founder of Healthdyne, whose Maternity Management subsidiary was one of the two companies that merged to form Matria, "We believe the statements issued by NWHN were made for the improper purpose of misleading and confusing physicians, to encourage them to hospitalize patients rather than utilize less expensive home care alternatives."

The managed care environment has put enormous economic pressures on hospitals who have seen their patient stays decrease over the years. With decreasing demand for hospital beds comes a shrinking revenue stream that can threaten the profitability of the hospital. For this reason, many hospitals avoid treatments that involve health care delivery in the home or any other location that does not require a patient visit or an overnight stay.

Matria Healthcare is the leading national provider of comprehensive obstetrical home care and other maternity management products and services to HMOs, indemnity carriers and employers. Its services include the subcutaneous delivery of terbutaline, an agent commonly prescribed by physicians to quiet uterine activity, using a miniature infusion pump. A number of studies, published in respected peer-reviewed scientific journals, have validated the clinical effectiveness of this therapy.

Petit continued, "To have an organization such as the National Women's Health Network say in public and in print that Matria is 'putting profits ahead of scientific knowledge' is outrageous and a huge disservice to the thousands of women -- and children -- who are healthy today because of our support of obstetricians who care for this very high risk patient group."

Matria noted that premature birth is still the leading cause of infant morbidity and mortality in the U.S. today. "It would be a sad day, indeed, if a special interest group was able to use fabricated information to curtail the use of this type of physician-prescribed therapy," said Petit. Women can be carefully monitored by health professionals in the privacy and comfort of their own home rather than in the much more expensive hospital environment. This saves the healthcare system millions of dollars each year.

"We cannot in good conscience allow this kind of well-orchestrated campaign of deception to go unchallenged and potentially cause an effective therapy, that has improved the outcomes of thousands of pregnancies, to be denied to the women who need it."

CONTACT: Duffey Communications

Judith Webb, 404/266-2600

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