KPC Seeks Bankruptcy Protection After Closing Clinics
KPC Medical Management closed its 38 Southern California medical offices yesterday, the Orange County Register reports. KPC announced Friday that it would close its clinics after all its managed care partners announced plans to transfer their members to other providers. William Thomas, KPC's general counsel, said the company will file for Chapter 11 bankruptcy protection either today or tomorrow, which would allow it to "wind down" its business matters instead of handing them over to a trustee. For the next one to two months, a "skeletal KPC staff" will work on the transfer of medical records, lab results and "pending authorizations for surgery and other procedures." KPC President Donald Smallwood "warned" the company's 2,000 doctors, nurses and employees "not to cash" their final paychecks because it did not have "enough money in the bank."
KPC's demise will affect roughly 300,000 patients who used its clinics (Wolfson/Heisel, Orange County Register, 11/21). Yesterday, one clinic featured a sign on its door that read: "No appointments will be seen today. For medical emergencies, call 911." Some clinics were staffed with KPC employees, who were joined by health plan representatives who attempted to direct patients to a new physician or to emergency rooms. The state has ordered all insurers with former KPC members to run newspaper ads "with phone numbers for patients to call if they need care." Health plans are in the process of sending letters to displaced KPC patients telling them the doctor to whom their medical records will be sent. Walter Zelman, president of the California Association of Health Plans, offered advice to former KPC patients, saying, "The most important thing people should recognize is that this is a medical group that is in financial difficulty -- not their health plan. Their health plan is obligated to give them all necessary care at the time they need it" (Bernstein et al., Los Angeles Times, 11/21). While many KPC patients remained "baffled," Joy Higa, a senior official at the Department of Managed Health Care said that she was "confident" they would be able to sign up with other doctors' groups. Talbert Medical Group in Costa Mesa has said that it could take up to 8,000 former KPC patients and an unnamed number of former KPC doctors, while St. Joseph Health System has indicated it could handle up to 30,000 new patients (Orange County Register, 11/21). A timeline detailing the rise and fall of KPC is available from the Orange County Register at http://www.ocregister.com/news/california/kpc0t1121cci.shtml