MEDPARTNERS: Unexpected Divestitures Drive Q2 Losses
Citing unforeseen costs in exiting the physician practice management (PPM) business, Birmingham, AL-based MedPartners Inc. posted second-quarter losses of $187.6 million, or 96 cents per share, the Wall Street Journal reports. But MedPartners reported revenues of $11.7 million, or six cents per share, from continuing operations -- mostly its Caremark pharmacy benefits management (PBM) business -- up from the earnings of $817,000, or one cent per share, for the same period a year ago. Meanwhile, overall revenue rose 25% to $796.2 million, up from $639.5 million a year ago. MedPartners reported a second-quarter charge of $199.3 million, or $1.02 per share, reflecting legal costs related to dissolving its PPM business, losses on the sale of its clinics, and "higher-than-expected costs of operating the clinics prior to the sale." The U.S. Bankruptcy Court approved California's decision to oust MedPartners' health plans and clinics from the state last month, after California had seized control of MedPartners in March. Currently, all of MedPartners' California clinics have been sold or "are under contract to be sold," while fewer than "20 practices elsewhere remain to be sold" (Carrns, 8/12).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.