MEDPARTNERS: HMOs Kick in $25M to Guarantee Fund
MedPartners Inc. has agreed to provide a $25 million letter of credit to secure the financial health of its ailing California provider network in a deal with the state, and a group of HMOs has agreed to pony up an additional $25 million, in a possible admission "by HMOs that the fixed fees they pay to MedPartners ... aren't adequate." The California Medical Association's Steven Fleischer said "it's HMOS that will ultimately look bad if the MedPartners network unravels and patient care is disrupted." He added, "The health plans are anteing up. They don't want to gain a bad reputation for the contracting decision they made." The Orange County Register reports that the deal, "if approved by all parties," should be finalized by April 24 according to documents MedPartners filed with the U.S. Securities and Exchange Commission. MedPartners spokesperson Robert Mead "said the $50 million guarantee, combined with proceeds from the sale of MedPartners' California network, will ensure payment for patient care as the company leaves the physician practice management business" (Crabtree, 4/17).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.