A poster child for organized medicine's fight against HMOs said internal operational problems-not managed care-were to blame for its demise.
Genesis Physician Practice Association, a Dallas-area independent practice association that claims 960 physician members, last week filed for Chapter 11 bankruptcy protection while it reorganizes.
Chairman Ralph Turner, M.D., said the 3-year-old IPA has about $3 million in assets and owes between $3 million and $10 million, mainly to local physicians and hospitals.
Last fall, Genesis received national attention when its physicians elected not to renew their capitated contract with Aetna U.S. Healthcare. At the time, Genesis management said the insurer was not providing the data necessary to manage risk.
The IPA, along with the Texas Medical Association, was active in efforts to pass legislation to give physicians more clout to negotiate with managed-care companies. A bill giving Texas physicians antitrust relief to negotiate nonfinancial issues with insurers was signed into law (June 28, p. 10).
Genesis acknowledged last week that its own operational problems were primarily at fault for its failure.
In a news release, Genesis said the "deciding factor" was a backlog in claims that made it impossible to gauge and manage utilization. The IPA said it has seven HMO risk contracts covering about 30,000 patients.
In an interview, Turner said a backlog developed while the IPA was using a claims processing unit operated by Arlington, Texas-based Harris Methodist Health Plan, owned by Texas Health Resources, a healthcare system based in Irving. He said the backlog continued when the IPA switched claims processing late last year to Dallas-based Inova Health.
Turner added that HMO payments were too low and a key hospital partner, Presbyterian Hospital of Dallas, pulled out of a contract.
Jerry Patterson, executive director of the Texas Association of Health Plans, said he found the bankruptcy filing ironic because the IPA dropped a major book of business in Aetna, which had about 26,000 enrollees covered under contract with Genesis. "Maybe there is fault on both sides, but we don't know that one way or the other. It's always convenient to blame someone else for your failures," he said.