MEDPARTNERS: Judge Rejects Governor-Endorsed Settlement
Despite its endorsement by Gov. Gray Davis (D) and the California Medical Association, a Los Angeles judge late Wednesday refused to sign a settlement that would have allowed bankrupt MedPartners Provider Network, California subsidiary of Alabama-based MedPartners Inc., to "continue providing health care to more than 1 million Californians." The San Francisco Chronicle reports that Superior Court Judge Alan Buckner said the agreement "is a resolution of nothing," not least the $100 million in unpaid bills to California providers, and "an invitation to litigation." Buckner added, "This document is, in reality, no more than a ... temporary abatement of hostilities. ... It is an agreement to disagree. I decline to participate in it." Critics of the settlement, which was negotiated by Maria Contreras-Sweet, Davis' cabinet secretary for business, transportation and housing issues, allege it benefits MedPartners while leaving its doctors unpaid.
All Happened Too Quickly?
The state took control of MedPartners Provider Network in March and stopped the flow of revenue to its Alabama parent, redirecting it to unpaid provider bills in California. But MedPartners argued the move "disrupted the flow of funds to institutional providers, physicians and clinic employees, which jeopardize(d) the state's healthcare system." MedPartners' hire of Darius Anderson, longtime friend of Gov. Davis and orchestrator of his inauguration in January, was quickly followed by MedPartners' agreement to sell its California division and the state's return of the network's control to the parent company -- a move that drew criticism from the CMA. "MedPartners became insolvent because the parent company was sweeping out all the money from the subsidiary and keeping a significant portion for itself," said Dr. Jack Lewin, CMA CEO, adding, "A far better approach would be to have the conservator, who is the agent of the bankruptcy court, enforce the agreement." Judge Buckner gave the two parties until next Wednesday to reach a new agreement. "This is last chance time," he said (Lucas, 6/11).
Big Sell Off
In other MedPartners news, the company agreed yesterday to sell nine of its clinics in the state to Talbert Medical Group Inc. and TM Acquisition. Terms of the deal were not released. The clinics have 120 doctors and serve 70,000 patients ( Bloomberg News/Los Angeles Times, 6/11).