MEDPARTNERS: Permanent Deal Expected This Week
As an interim agreement between the state and MedPartners Inc. expires at the end of today, some action is expected between the parties on a more permanent arrangement, the Los Angeles Times reports. MedPartners has been pushing for a deal, because in the absence of a new arrangement, control of its assets, along with the right to represent itself in bankruptcy court -- guaranteed under the temporary deal -- would revert to the state. Should that happen, the company "could be forced into technical default on hundreds of millions of dollars worth of bonds." The state, however, wants assurances that MedPartners will pay the $100 million it owes hospitals and doctors, as well as debts related to the health clinics it owns (Bernstein, 5/27). Dr. Jack Lewin, president of the California Medical Association, said the firm is using "strong-arm tactics" to force a deal, fearful that the investors might seize its assets. But bondholders assert that they have a "right to demand their $480 million investment back if a major 'triggering' event occurs -- such as a bankruptcy case." Court-appointed special monitor Mark Abernathy said a new agreement could come as soon as today (Crabtree, Orange County Register, 5/27).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.