KPC MEDICAL MANAGEMENT: HMOs Can Pick Up Slack if Necessary
California HMOs have told state regulators they can cover the more than 500,000 patients who would have to change providers if financially unstable KPC Medical Management goes bankrupt, the Orange County Register reports. In written responses to a letter sent by the Department of Corporations, then the agency responsible for HMO oversight, many of the 12 HMOs that contract with KPC indicated that they could guarantee continuity of treatment for KPC patients with chronic or acute conditions. But Michael Chee, spokesperson for Blue Cross of California, said, "[T]he reality is that a medical group could tell us they're no longer able or willing to accept patients, and that's something out of our control." The Anaheim-based KPC reportedly is "weeks behind" in payments to vendors and doctors. KPC officials have indicated that the group must receive higher HMO reimbursements to avoid insolvency. Prospect Medical Group, a possible alternative for KPC patients, said it could take on at least 50,000 of KPC's 100,000 Orange County enrollees. "We have quite a few physicians in Orange County. We are definitely financially viable," Peter Goll, Prospect's senior vice president for business development, said. But others in the state's medical community questioned doctors' ability to absorb such a large number of patients. "With the amount of dollars the health plans are passing on to providers, and the amount of risk they are asking the providers to take on, an organization that got a tremendous influx of patients wouldn't be financially stable very long," Elliot Sternberg, chief medical officer of St. Joseph Health System, said. St. Joseph, Orange County's largest medical group, said last week it would no longer accept new HMO patients and would be unable to take any KPC patients. KPC President Donald Smallwood added, "I'm somewhat surprised that everybody feels they have extra capacity. The troubled state of medical practices in California would tell me that's not necessarily the case." The health plans said they will continue to work with KPC on a plan to keep the group afloat (Wolfson, 7/6).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.