Santa-Ana Based TriCare Will Go Public : Stock offering: Company that provides medical appraisals used to resolve workers’ compensation claims hopes to raise $5 million.

SANTA ANA — TriCare Inc., a major provider of medical evaluations used to resolve disputed workers’ compensation claims, plans to go public early next month, despite a state-mandated rollback of fees in the industry that could hurt its revenues and profit.

TriCare, which does business under the name of its lone subsidiary, First Western Health Corp., hopes to raise between $4.5 million and $5 million by selling 1.6 million shares of its stock at $6 to $8 per share, according to the company’s prospectus.

The Santa Ana-based company plans to offer about 900,000 shares of stock being sold by current shareholders, including 724,100 shares held by Dr. Myron H. Marshall, a TriCare director and former chairman, and his wife. TriCare also will offer 700,000 newly issued shares.

TriCare, which had sales of $20.5 million and earnings of $1.26 million in its 1989 fiscal year ended May 31, has enjoyed a rapid growth in business in recent years. TriCare claims to be the largest company in the state that specializes in providing medical evaluations in workers’ compensation disputes, said Charles Burwell, president of First Western and executive vice president of TriCare.

The industry--composed of a large number of mostly small firms--generated sales of about $500 million in California alone in 1989, Burwell said.

Stephen F. Bullock, TriCare’s chief executive, and Lawrence S. Wasserman, its chief financial officer, are meeting this week with securities analysts in San Francisco, Minneapolis, Chicago, Boston and New York to tell the company’s story.

Burwell said TriCare provides the evaluations for attorneys representing injured employees. In 1988, First Western had about 6% of that medical evaluation business in California.

“Five years ago we had four or five physicians and a couple of locations in the state and now we have over 200 physicians (all independent contractors) and 25 locations” where patients are examined, Burwell said.

Nicholas Byhower, a Santa Ana workers’ compensation attorney, said First Western “has more credibility” than most companies in its business and, because of its large medical panel, has the advantage of being able to provide physicians in hard-to-find specialties.

But Norman G. Fosback, who edits a Fort Lauderdale, Fla., newsletter specializing in new stock issues, is not recommending TriCare’s stock. He believes it is overpriced, especially considering that this year the state has required a 10% rollback in the medical evaluation fee schedule.

Burwell said the company intends to respond to the state rollback by tightening cost controls to boost profits and by continuing to look for ways to expand its market share.

TriCare said in its prospectus that it intends to use the money from the stock sale to diversify. Burwell said it plans to expand both geographically and into new business areas such as providing diagnostic and physical therapy services for injured workers.

In addition, he said, TriCare hopes to expand, through acquisitions of other companies, into the businesses of providing treatment or vocational rehabilitation of workers. The company said in its prospectus, however, that “no definitive acquisition candidate has been identified at the present time.”