Sonoma County Doctors File Motion to End Contracts with Health Plan of the Redwoods

Sixteen Sonoma County doctors have filed motions with the U.S. Bankruptcy Court in Santa Rosa, seeking to be released from their contractual obligations with Health Plan of the Redwoods, the Santa Rosa Press Democrat reports. The motions are the first legal challenge to HPR's bankruptcy reorganization (Allday, Santa Rosa Press Democrat, 6/13). Faced with an $8 million budget deficit, HPR filed for federal Chapter 11 bankruptcy protection on May 31. As part of its reorganization plan, which must be approved by the bankruptcy court, hospitals and doctors contracting with HPR would be required to "slow their billings and reimbursement requests for services" (California Healthline, 6/3). The doctors, whom HPR pays on a fee-for-service basis, say the health plan owes them millions of dollars in reimbursements, which are being held up by the bankruptcy proceedings. Dr. Walter Tom, who joined the motion, said, "To continue to participate with Health Plan of the Redwoods would not be a smart fiscal decision for our own stability. We feel that we need to get out as soon as possible." Unlike doctors who receive reimbursement on a fee-for-service basis, doctors who have contracted with HPR on a capitation basis have been receiving their monthly payments during the bankruptcy proceedings. HPR CEO John Baxter said he did not know the details of the doctors' motion but did not expect many of the health plan's doctors to leave. Patients whose doctors leave the program would need to switch health plans to remain with their doctors (Santa Rosa Press Democrat, 6/13).