KPC: Medical Group Teeters on Brink of Bankruptcy, CMA Says
Doctors affiliated with KPC Global Care Inc. have been warned by the California Medical Association that bankruptcy "may be imminent" for the state's largest for-profit medical group, the Los Angeles Times reports. In June, the group was months behind in payments to physicians, many of whom were quitting or threatening to leave the network, and KPC owner Dr. Kali Chaudhuri predicted that the network would remain financially viable for the next two to four months without help from health insurers. Adding to the group's problems, Cigna Corp. and Blue Shield of California, together representing 100,000 KPC patients, last month announced their plans to switch their patients to other medical groups. Having supported Chaudhuri in his efforts to keep KPC afloat, the CMA expressed concern about the pullout. While Cigna and Blue Shield already have begun to remove patients from KPC, the CMA warned that the move could "destabliliz[e]" the group to the point of bankruptcy if other health plans fail to provide loans and patients. Although several health plans already have donated $12 million and have been negotiating a rescue plan for weeks, no deal has materialized. If KPC does crash, it will mark the second time in less than two years that the network's more than 500,000 patients and several thousand doctors will be forced to regroup or find a new health plan. Chaudhuri, however, remained optimistic, stating that he is "very close" to completing a deal (Bernstein, 8/3).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.