ORANGE COUNTY: St. Joseph May Cancel PacifiCare Contracts

      Involved in a legal battle with PacifiCare, St. Joseph Health System, Orange County's largest medical group, is threatening to cancel its contracts with the health plan, the Orange County Register reports. If the group follows through on its threats, 120,000 Orange County HMO members would be forced to find new doctors. The announcement comes after Pacificare sued St. Joseph last week over the medical group's plan to stop admitting new HMO members. PacifiCare alleged that the medical group violated its contract with the health plan by failing to adhere to the 90-day notification requirement for freezing enrollment. On Friday, a judge ordered St. Joseph to continue care for PacifiCare patients in the short-run. St. Joseph has sent notices to PacifiCare, announcing it will terminate five of its 14 contracts with the health plan. St. Joseph CFO Joseph Randolph indicated that the group also was contemplating terminating its nine other contracts with PacifiCare. Anticipating a $45 million loss on its HMO contracts, St. Joseph is asking managed care companies to increase their reimbursement rates. Noting that other health plans already are negotiating with the medical group, Randolph said, "PacifiCare is the only one at this point that has not stepped up." However, PacifiCare spokesperson Tyler Mason dismissed the termination notices as posturing, saying, "This is just negotiation through the media." He added, "It's standard practice whenever they want to make sure they get our attention. We look forward to working this out with them" (Wolfson, 7/11).