Problems for Sacramento Physicians Group Grow After Radiologists Cancel Contract

One of the Sacramento area's largest radiology companies has canceled its contract with the Golden State Physicians Medical Group, an independent practice association, further complicating the group's "struggle for business survival," the Sacramento Business Journal reports. Radiological Associates of Sacramento stopped performing outpatient diagnostic tests for Golden State's 450 doctors on Jan. 31, terminating a more than five-year relationship. "The problem was failure to pay on past-due accounts," Dr. Robert Lincoln, president of the radiology group, said, adding, "We've been supportive of them, offered flexibility in rescheduling payment terms, and they failed to come through with their promises." Lincoln said that while Golden State owes his group a "substantial" amount of money, it will continue to see patients who are in ongoing treatment.

The contract cancellation marks the "latest of several mounting financial burdens" for Golden State, which serves about 27,000 people in the region. Founded in 1996, the IPA was profitable through 1999, when it expanded into El Dorado County. But since then, Golden State has seen its business decline. On Jan. 1, it hired its second management company in less than two years after the first -- Medical Pathways -- failed to pay doctors on time. In the latest financial data available from the Department of Managed Health Care, Golden State met only one of four solvency standards. The IPA hopes that its new management company, Pacific Partners Management Services, will restore some stability. Garry Maisel, CEO at Western Health, which has about 7,000 enrollees served by Golden State, said he thought the switch would benefit the IPA. He said the problem "was not Golden State, it was the inability of Medical Pathways to pay providers in a timely way. My hope is that physicians in the community will give Golden State some time to prove they are a quality organization" (Robertson, Sacramento Business Journal, 2/8).