Bankruptcy Court Judge Allows Health Plan of the Redwoods To Hire Financial Consultant

Health Plan of the Redwoods received permission on Thursday from U.S. Bankruptcy Judge Alan Jaroslovsky to hire Phoenix HealthCare Consulting to assist with a financial reorganization plan due in two months, the Santa Rosa Press Democrat reports. The judge denied HPR's original request for approval to hire Phoenix at a flat monthly rate of $45,000. Instead, he ruled that HPR could retain Phoenix Healthcare Consulting by paying a $10,000 deposit, but the health plan will have to seek additional court approval for Phoenix to perform specific consulting tasks, which cost $250 an hour. Phoenix, which specializes in business plan evaluations and contract reviews and has previously assisted Blue Cross of California and Health Net, will help HPR create a reorganization plan outlining how it will "convince doctors and hospitals to accept lower reimbursement rates and ... employers and individuals to pay higher" premiums. The plan is due by Sept. 30 (Rose, Santa Rosa Press Democrat, 7/26). Earlier this month, Jaroslovsky ruled that HPR may not exit the Medicare+Choice program on Aug. 31, as it requested as part of its reorganization, and must continue to provide coverage until Oct. 31, even though the plan claims to be losing $1 million per month because of its participation (California Healthline, 7/18).

Even though HPR's bankruptcy has "put pressure" on area community hospitals, which "face significant losses" as seniors enrolled in HPR's Medicare+Choice plan lose coverage, "it should be encouraging to local residents that Kaiser [Permanente] is now quietly trying to reach contract agreements" with Healdsburg, Palm Drive and Sonoma Valley hospitals, the Santa Rosa Press Democrat states in an editorial. Kaiser has pledged to add 600 new members to its Medicare HMO, while Health Net, PacifiCare and Blue Cross also are working to sign contracts with area hospitals. These efforts will "provide residents more alternatives" and "brin[g] into focus what Sonoma County may look like without HPR," the editorial concludes (Santa Rosa Press Democrat, 7/29).