FPA MEDICAL MANAGEMENT: PacifiCare Nullifies Most Contracts
In yet another financial setback for FPA Medical Management Inc., PacifiCare Health Systems announced Thursday it was canceling "all but a handful" of its contracts with the San Diego-based physician management company. In ending the contracts, PacifiCare cited millions of dollars in back payments that FPA owes doctors who treat PacifiCare members. PacifiCare spokesperson Susan Whyte-Simon said, "Our first responsibility is to ensure uninterrupted and unhindered access to physicians, and that has become difficult because of FPA's lack of payments to their contracted physicians." The Los Angeles Times reports that "PacifiCare said the canceled contracts will affect nearly 200,000 members -- about half of them in California -- in 22 FPA medical groups in four states." One source estimated FPA would lose almost $100 million a year with the demise of the PacifiCare contracts.
Tip Of The Iceberg
FPA's problems with PacifiCare are not the only facet of its financial struggles. FPA also announced Thursday that it obtained $25 million in additional loans from its creditors (Olmos, 7/3). The San Diego Union-Tribune reports that FPA will "use $22 million to pay doctors and other key vendors. The balance will be used for corporate purposes, the company said, including payments it needs to continue services it is contracted to provide." Last week, FPA also pulled its operations out of Texas entirely -- the "biggest public retreat" for FPA (Rose, 7/3). To read California Healthline's coverage of FPA's financial problems, click here.