CANAL SQUARE

1054 THIRTY-FIRST STREET, N. W.

WASHINGTON, D. C. 20007-4492

ROBERT H. MORSE

MORRIS R. GARFINKLE

EDWARD D. GREENBERG

MARK S. KAHAN

SUSAN B. JOLLIE

ANDREW B. SACKS

DAVID K. MONROE

DAVID P. STREET

MARK W. ATWOOD

ROBERT W. KNEISLEY

GERALD SEIFERT*

STEVEN JOHN FELLMAN

ROBERT D. ROSEMAN

JEFFREY K. KOMINERS

CHARLES H. WHITE, JR.

KEITH G. SWIRSKY

ANTHONY J. McMAHON

F. WILLIAM CAPLE

ANITA M. MOSNER

ROBERT N. KHARASCH

OF COUNSEL

(202) 342-5200

TELEX: 89 2520 (WU)

440297 (ITT)

TELECOPY: (202) 342-5219

(202) 337-8787

June 23, 1994

WILLIAM E. KLAWONN

ANDREW T. GOODSON

ERIC N. MILLER

PETER J. PETESCH

DONALD H. MEIERS

JOEL E. LAIKS

RICHARD BAR

GREGORY P. CIRILLO

DANIEL B. HASSETT

GEORGE D. NOVAK, II*

SUSAN M. KLIMEK

CYNTHIA C. CRAWFORD

HOLLY HAMILTON

XIANPING WANG*

MARK N. FARMER*

MICHAEL R. CARITHERS, JR.

KATHERINE M. ALDRICH

CAROLE A. FRERET

JAMIE PALTER RENNERT

SCOTT A. MOREHOUSE*

JENNIFER A. COHN*

*NOT ADMITTED IN D.C.

SAMUEL W. FAIRCHILD

GKMG CONSULTING SERVICES

WRITER'S DIRECT DIAL NUMBER

(202) 342-5200

VIA HAND DELIVERY

Honorable Anne Bingaman

Assistant Attorney General

Antitrust Division

U.S. Department of Justice

10th & Pennsylvania Avenue, N.W.

Washington, D.C. 20530

Re: Request for Business Review - Proposed

Orthotics and Prosthetics Network

Dear Assistant Attorney General Bingaman:

Hanger Orthopedic Group, Inc. ("Hanger"), respectfully requests the response of the Antitrust Division, pursuant to the Business Review Procedure established in 28 CFR Section 50.6 with respect to the Antitrust Division's current enforcement intentions regarding the proposed conduct of Hanger as described in the enclosed materials.

Hanger proposes to create a provider network consisting of clinical orthotic and prosthetic ("O&P") facilities in a number of local geographic markets throughout the United States (the "Network"). The clinical O&P facilities participating in the Network would include both O&P facilities owned by Hanger ("Hanger O&P Facilities") and O&P facilities owned by persons or entities unrelated to Hanger ("Independent O&P Facilities"). The Network would be formed for the purpose of increasing the ability of such facilities to compete for provider contracts with

Honorable Anne Bingaman

June 23, 1994

Page 2

national, regional and local third-party payer organizations regarding the delivery of high quality orthotic and prosthetic devices and services to the subscribers/beneficiaries of health plans operated by such third party payers. The Network will be organized and operated in a manner intended to offer competitive prices through volume-related efficiencies and centralized negotiation and administration of such third party payer contracts.

Enclosed is a document entitled "Summary Description of Proposed Network of Orthotics and Prosthetics Providers," which describes in more detail the proposed organization and operation of the Network. Also enclosed is a draft of a proposed Network Agreement, intended to form the contractual basis of the relationship between Hanger and each Independent O&P Facility electing to join the proposed Network.

After you have reviewed the enclosed, we would welcome the opportunity to meet with you or a member of your staff to discuss the proposed Network and to answer any questions you may have.

Very truly yours,

Steven John Fellman

William E. Klawonn

Enclosures