Fresno County Employees Say ‘Greed’ Led to PacifiCare Contract Cancellation

"[C]orporate greed, rather than patient need" prompted PacifiCare of California to cancel its contract with Saint Agnes Medical Center and its physician group, Matrix, Fresno County employees said during a meeting yesterday morning with PacifiCare representatives. The Fresno Bee reports that the meeting was "intended to educate employees and answer questions about the change of health care providers," but the session "became contentious" when more than 350 PacifiCare beneficiaries "attacked and criticized" the company. PacifiCare canceled an afternoon meeting with county retirees. PacifiCare's contract with Saint Agnes and Matrix ends May 1, at which time the managed care company's contract with Community Medical Centers and Sante Community Physicians takes effect. County employees have until May 23 to find a new primary care physician. PacifiCare said that about 80% of its members will be able to continue with their primary care provider because physicians are moving from Matrix to Sante. County employees have expressed concern about "fewer doctors accepting patients, ending long-time patient-doctor relationships or moving from Saint Agnes." PacifiCare maintains that it canceled the contract with Saint Agnes and Matrix because the physician group was "financially strapped." County executives are considering establishing a PPO option for employees, the Bee reports (Trujillo/Nax, Fresno Bee, 4/19).

In the meantime, Matrix doctors are denying PacifiCare's claims that the physician group is financially unstable, the Bee reports. Matrix board President Dr. Daniel Little called the claims "inaccurate and untrue." Matrix officials said the group has experienced prior "financial difficulties," but last year made a $650,000 profit and has made a profit of $70,000 for the first two months of 2001. In addition, the group is "expected to perform even better next year under an 18-month-old reorganization plan," the Bee reports. Matrix officials said PacifiCare used the group as a "scapegoat" for deciding to cancel the Saint Agnes contract, adding that the "real reason for the move was a new money-losing contract with Saint Agnes." But PacifiCare spokesperson Tyler Mason maintained that the company canceled the contract because of the doctor group's insolvency, adding that if PacifiCare did not act, 61,000 Valley beneficiaries "faced greater disruption in health care services." Mason pointed to an audit performed last December by the Department of Managed Health Care that identifies "more than a dozen deficiencies" at Matrix. For their part, Matrix officials said the group has been addressing problems under a department-approved plan. They added that the group probably "won't be able to survive" without its PacifiCare contract -- the only HMO contract it has -- and is considering filing for bankruptcy protection. In addition, Matrix officials said they have "not ruled out future legal action against PacifiCare" over breach of contract concerns (Correa, Fresno Bee, 4/19).