FPA MEDICAL MANAGEMENT: Sells Unit, Exits California Market
A U.S. bankruptcy judge last week agreed to let FPA Medical Management Inc. sell its Axminister Medical Group, the bankrupt physician-management company's only remaining practice group in California. Judge Peter Walsh ruled that FPA, as part of its Chapter 11 restructuring plan, can sell Axminister for $1.35 million back to the group of 20 doctors who had sold it to FPA for $16.2 million in stock in 1997. The Los Angeles-based group currently serves 17,000 patients. "This sale marks FPA's exit from the California market," said John Butler, FPA's main bankruptcy lawyer. Bloomberg News/San Diego Union- Tribune reports that officials at the California Medical Association say "[t]here won't be many tears over FPA's departure from California." The CMA contends that FPA still owes about $60 million in unpaid bills to doctors throughout the state. "They've burned all their bridges in California, so I don't think anyone is sorry that they've gone," said Sam Maizel, an attorney for insurers who had contracts with FPA. Bloomberg/Union-Tribune reports that many insurers have had to pay FPA claims twice: once as part of the flat fee to FPA, and a second time directly to doctors after FPA declared bankruptcy (12/10). Click FPA Medical Management for past coverage.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.