Another Maryland physician practice management company has filed for bankruptcy, citing reduced Medicare reimbursements and the crash of the Medicare HMO industry.
Maryland Personal Physicians, based in Baltimore, filed for protection under Chapter 11 Sept. 2. The group incurred losses of more than $7 million. Creditors include Mercy Medical Center in Baltimore, St. Joseph Medical Center in Towson and the Upper Chesapeake Health System in Harford County, the group's three sponsoring hospitals. Mercy provided $14 million in seed money for the group.
Two other Baltimore-area PPMs have filed for bankruptcy since November, blaming low reimbursements.
Maryland Personal Physicians was founded in November 1995 under the assumption that physician groups were the wave of the future and that 25 physicians could operate more cheaply than one physician, says Gary Michael, vice president of marketing at Mercy Medical Center and spokesman for Maryland Personal Physicians.
"Unfortunately in the long run, neither has proven true," he says. Inadequate reimbursement from Medicare and some Medicaid HMO contracts and the departure of some insurers from the Medicare HMO market have contributed to the financial problems, Michael says.
The group lists 130 physicians and nurse practitioners that they manage or own.
In Colorado, 44-doctor Aurora Associated Physicians, an independent practice association, said it will drop Aetna U.S. Healthcare at the end of the year because of concerns over low reimbursement, administrative hassles and low member satisfaction. The move will affect about 7,000 patients. The group, which last year dropped Blue Cross Blue Shield after premium cuts, reportedly has been unable to pay many of its doctors because of financial difficulties.
Aetna says it will try to negotiate with the group and if necessary with individual doctors themselves.