VENTURA COUNTY: Largest Medical Group Shuts Down

      Teetering on the "brink of closure for months," Family Health Care Medical Group, Ventura County's largest medical group, yesterday laid off 300 employees and shut down operations, the Los Angeles Times reports. Faced with a growing $6 million debt and the cancellation of contracts with two large HMOs, FHCMG's "failure was assured," according to the group's spokesperson Mari Zag. In addition to the two canceled contracts, Zag reported that two other health plans either did not make their October payments or "grossly underpaid" the amount due. "I've been in health care for 25 years, and this is the worst (business climate) I've seen," Zag said. The closure of the Simi Valley-based medical group will displace 135,000 patients and will affect 200 primary care doctors and about 700 specialists affiliated with the plan. It also leaves about 12 hospitals in Ventura and Los Angeles counties with unpaid bills (Kelley, Los Angeles Times, 10/17). According to Dr. Michael Huff, president of the Ventura County Medical Association, local and state medical associations are urging health plans to "do what they can to maintain continuity of care and patient-doctor relationships" (Smith, Ventura County Star, 10/17). Last month the California Medical Association sought a $3 million emergency loan to keep the group afloat, stating that no other local physician groups would be able to handle the number of extra patients displaced by FHCMG's closure (Los Angeles Times, 10/17). However, state regulators said that there had been "little expectation of a loan agreement" for the medical group; FHCMG officials reported that without the loan, the company "would have to consider bankruptcy" (Ventura County Star, 10/17). Founded seven years ago, Family Health Care operated four clinics located in Camarillo, Thousand Oaks and Simi Valley and "acted as a middle man between" a network of physicians and HMOs. The group's largest contractors were California Care Blue Cross, with 33,000 patients, Health Net and PacifiCare, each with more than 20,000 patients. FHCMG also had contracts with 16 other health plans, including Cigna, Aetna U.S. Healthcare, Blue Shield, Maxicare and three senior-care programs (Los Angeles Times, 10/17).