MEDPARTNERS: Courts Suitor for Some CA Operations
Pressured by "California regulators and angry doctors to resolve a crisis" within its state physician practice management firm, MedPartners Inc. said yesterday it is in talks to sell certain practices to Riverside-based KPC Global Care Inc. Global Care general counsel William Thomas said the companies have entered an exclusive-negotiation agreement, which represents "200 physicians, 27 clinics, one hospital and 160,000 patients in the Inland Empire" of San Bernadino, Riverside and Orange counties. MedPartners spokesperson Robert Mead said the sales talks do not include the operations seized by California regulators last week, but that the move marks an "important step" in exiting the PPM market and that "other potential buyers" exist for other operations. The Wall Street Journal reports that it is unclear how California regulators would respond to the potential sale. But Conservator Eugene Froelich said, "My interest is to protect the assets of [California-based MedPartners Provider Network], and we would have to look at any agreement to see if it is affecting the assets of MPN." At a public hearing in Los Angeles yesterday, "an attorney whose firm has been retained by Froelich" said the state may have to take action if "health plans don't honor their commitments to continue payments to the network, or if doctors refuse to see enrollees" (Hays/Rundle, 3/17).
According to Keith Rosenbaum, an attorney representing some of the doctors involved in the sale negotiations, Global Care will sell individual physician's group practices back to the various physicians groups at the completion of their deal with MedPartners. Rosenbaum called the buy-back arrangement "a positive solution to a potentially disastrous situation" that could start a national trend (release, 3/16).