FPA: Stock Rallies On News Of PacifiCare Deal
Shares of San Diego-based FPA Medical Management Inc. jumped 63% Thursday after the physician practice management company announced it had reached a deal with PacifiCare Health Systems Inc. under which the HMO would increase reimbursements for enrollees in Nevada beginning in the third quarter. The company said that the increased reimbursements, coupled with "aggressive cost-cutting," should return the Nevada division "to profitability." It did not specify the size of the increase. Bloomberg News/San Diego Union-Tribune reports that FPA is also "negotiating with Foundation Health Systems Inc. to increase premiums it receives for treating some 175,000 Foundation members in California, Arizona and Florida." Foundation spokesperson David Olson said the HMO would "take all reasonable steps to maintain ... stability" in the market. FPA officials declined to comment on ongoing negotiations to "obtain new financing and renegotiate the terms of outstanding debt" (5/22).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.