KPC: Begins Paying Overdue Bills with Loan from Insurers
Using a $30 million loan from health plans, "struggling" KPC Medical Management is starting to repay its overdue debts to doctors and vendors, the Orange County Register reports. With doctors and suppliers threatening to "cut off" services to KPC, the firm "was on the verge of bankruptcy" when it negotiated a loan last month from eight HMOs to pay off its debt of more than $25 million. KPC President Donald Smallwood said, "It's good to have a little money in the bank and be able to pay people." He added, "It's still a very difficult business. We're not out of the woods yet." Creditors said they had received checks for a portion of what they are owed and expect to get the rest in weekly installments across the next three months, though some said "glitches" in processing have led to smaller payments than they expected. Donna Cohen, the co-owner of the South Bay Cancer Center, said KPC paid her $35,000 last week, about 12% of the $300,000 she is owed and $20,000 less than she expected to receive. But Cohen, who almost had to close the center last month because of delayed payments, said she is "feeling pretty confident that they're going to pull it off." Los Alamitos anesthesiologist Howard Rosen said he will continue serving KPC patients, so long as the payments continue arriving weekly. Having "threatened" to halt services to KPC patients, he said, "I'm hopeful but not explosively happy. It would be better just to be paid up" (Wolfson, Orange County Register, 10/6).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.