CLINICS TO CLOSE. KPC Medical Management, the Riverside, Calif.-based practice management company that bought 84 of MedPartners' Southern California clinics this summer, announced it will close 29 of those clinics by midmonth.
KPC President Donald Smallwood says the clinics are spread across Orange, Los Angeles, Riverside and San Bernadino counties. The company is also reducing its administration sites to two from six and consolidating multiple computer systems into one. Smallwood wouldn't disclose how many physicians would lose their jobs in the closings.
The closures are an attempt to streamline KPC operations and reign in the MedPartners clinics. At the time KPC acquired the 84 clinics, Smallwood says, they were losing about $9 million a month. MedPartners had acquired practices so rapidly and so haphazardly, Smallwood says, that in some cases, MedPartners clinics were competing with other MedPartners clinics on the same block.
TENNCARE EVALUATIONS. Tennessee doctors would rather treat patients for free than take care of patients in the state's managed-care Medicaid program.
Forty-nine percent of primary-care doctors would accept new patients enrolled in TennCare, the state's managed-care program for uninsured and Medicaid recipients, according to a Tennessee Medical Association study. However, 60% say they would take charity patients.
Physicians evaluated 13 managed-care organizations, including three providing coverage under TennCare, based on business services and clinical activities in managing patient care. Two TennCare plans ranked 12th and 13th for accuracy and timeliness of payment.
Of the doctors surveyed, 27% said they borrowed money or dipped into personal accounts to cover administrative costs over the past year.
Lola Potter, public information officer for TennCare, says she can't see how any provider would "rather get nothing for their care (than) file a TennCare claim."
PACIFICARE SUED. PacifiCare Health Systems has joined the growing list of HMOs facing class action lawsuits. Enrollees of the Santa Ana, Calif.-based HMO sued Nov. 2 in San Francisco County Superior Court on allegations that PacifiCare failed to disclose company policies seeking to keep treatment costs and referrals down. The suit seeks class action status on behalf of 1.6 million California-based members over the past four years.
Alan Hoops, PacifiCare's CEO, told the Los Angeles Times that "it's unfortunate that trial lawyers are taking steps to drive up healthcare costs for consumers by forcing unwarranted, costly and protracted litigation."
In early October, a string of suits--all seeking class action status--were filed against some of the country's largest HMOs.
SEC INVESTIGATING AETNA. Aetna announced in late October that the Securities and Exchange Commission is investigating the accounting of Aetna's purchase of Prucare, which was part of Prudential Insurance Company of America. That deal, completed in August, made Aetna the industry leader with more than 20 million enrollees.
In early October, Aetna became the target of multiple class action lawsuits, accusing the company of, among other things, withholding information from members, mail fraud and extortion (see November, page 3).
Some analysts predicted that the SEC review could mean Aetna would have to restate earnings. The company reported third-quarter net income of $165.3 million. The company also plans to raise premiums for 2000 by at least 10 percent (see page 38).
The SEC said it can't comment on any possible reviews.