Having tentatively agreed to a final settlement with regulators regarding its bankrupt California operations, MedPartners is expected to exit that state by early 2000, industry sources said.
The settlement calls for MedPartners and the state to settle all litigation against each other. MedPartners will pay its creditors and guarantee continued patient care. It should sell its assets and exit the state in six to eight months, said Maria Contreras-Sweet, secretary of the California Business, Transportation and Housing Agency, which negotiated the deal.
Most of the remaining $30 million in assets of the MedPartners Provider Network likely will be sold to Riverside, Calif.-based physician practice management firm KPC Global Care, sources said.
A settlement, which the plan's creditor hospitals are expected to approve but haven't yet, was announced last week. "It's either get something or nothing, and something is better," said David Langness, a spokesman for University of California Los Angeles Medical Center, which MedPartners owes about $1 million. Creditors would get about 85 cents on the dollar, a source said.
Last week, MedPartners agreed to sell Talbert Medical Group, which has 120 physicians and 70,000 patients, to TM Acquisition, a group of Los Angeles physicians, for an undisclosed price. In May, it reached terms to sell four California medical groups with 135 physicians and about 100,000 patients to undisclosed parties. KPC is the likely buyer. MedPartners said it has reached terms to sell medical groups with 300 physicians treating more than 400,000 patients.
Sources said KPC, which manages 1,500 physicians with 250,000 enrollees in east suburban Los Angeles, has entered negotiations to buy the heart of MedPartners' California business: the Friendly Hills and Mullikin Medical Enterprises medical groups, which constitute about 70% of its operations.
Norm Martin, chief executive officer of 193-bed Parkview Community Hospital Medical Center in Riverside, is said to have arranged financing for a potential deal. Parkview and KPC formed a joint management company in April. Martin couldn't be reached for comment
MedPartners spokesman Robert Mead wouldn't say whether the company was negotiating with KPC exclusively on a Friendly Hills/Mullikin sale, although he noted the two sides began talks in March. KPC officials did not return repeated phone calls seeking comment.