Contra Costa County Physician Group May Face Bankruptcy After Cancellation of Health Net Contract
East County Medical Group, the "dominant" physician group in east Contra Costa County, may have to file for bankruptcy after Woodland Hills-based Health Net last month canceled a contract with the group, several East County board members said last week, the Contra Costa Times reports (Torres/Silber, Contra Costa Times, 12/31/03). Effective Jan. 1, Health Net had planned to switch about 7,900 members -- who account for about 42% of East County patients -- from the group to physicians affiliated with Hill Physicians or John Muir/Mt. Diablo Health Network, the Contra Costa Times reports (Silber, Contra Costa Times, 12/25/03). However, Health Net later said that only about 30% of East County patients would have to switch physicians because some East County physicians had moved to become affiliated with Hill Physicians or John Muir (Contra Costa Times, 12/31/03). East County board members said that they would decide whether the group would file for bankruptcy within the next week. The group includes about 200 physicians (AP/Los Angeles Times, 1/2).
Health Net officials in December 2002 informed East County that the company would cancel the contract with the group, but East County filed suit against Health Net to block the move. The lawsuit alleged that Health Net had no grounds to cancel the contract (Contra Costa Times, 12/25/03). A judge ordered Health Net to continue the contract through the scheduled expiration date, Dec. 31, 2003. The lawsuit over the contract is scheduled to proceed to trial in May (AP/Los Angeles Times, 1/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.