KPC MEDICAL MANAGEMENT: State Regulators Seek Contingency Strategies from Health Plans
With its jurisdiction over the state's health care plans winding down, the Department of Corporations sent letters to 16 health plans that contract with KPC Medical Management asking them to provide strategies to cope with KPC's possible bankruptcy. The Orange County Register reports that the letter said, "The department is concerned about the effect of this troubled provider network" on enrollees. KPC, which owns and manages 42 clinics in Southern California and has 520,000 patients, has been negotiating with health plans to avoid a "financial meltdown" such as the one that befell its predecessor, MedPartners Inc. The group, which two months ago borrowed $12 million from six health plans, may have to request additional loans to maintain solvency. "Both the hospitals and the HMOs are working cooperatively with us, and we see a solution pretty soon," Kali Chaudhuri, who purchased most of MedPartners' assets to form KPC, said, adding that "the bottom line is there isn't enough money." Jack Lewin, chief executive of the California Medical Association, said he was encouraged by the state's letter to the health plans: "I would like them to go one step further, which is to ask the plans to solve the problem before it actually happens, rather than just to create a contingency plan for disaster," he said. The Department of Managed Care, which is scheduled to take over health plan regulation on July 1, did not comment (Wolfson, 6/29).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.