MEDPARTNERS AGREES TO PAY DOCS. California doctors are one step closer to getting paid some of the $50 million they are owed by former practice manager MedPartners. Last year, the state of California seized a portion of the company after the Birmingham, Ala.-based PPM declared bankruptcy, exited the PPM business and changed its name to Caremark Rx. As part of a settlement between the state and MedPartners, the PPM agreed to pay at least 75% of outstanding claims.
Payments stopped abruptly last summer, however, and MedPartners agreed to start payments again only if physicians signed a release form promising not to sue the PPM. By December, a majority of physicians signed the release and to date about $10 million in claims have been paid. MedPartners promises to pay at least another $14 million to the physicians who signed the release forms, according to the California Medical Association. Another $12 million is in limbo because of those physicians who have not signed the release forms.
KPC LAYOFFS. Meanwhile, the California company that scooped up 84 MedPartners clinics last year just completed its second round of employee layoffs, reports the Orange County Register. Last October, Riverside, Calif.-based KPC Medical Management laid off 500 employees, and in January, KPC laid off another 100 employees. Also, last December, KPC closed 29 of the MedPartners clinics. The reductions are an attempt to stem the $9 million a month losses inherited from MedPartners.
BIG IPO FOR NEOFORMA.COM. Although some health technology stocks are stagnating, the online medical product and supply company Neoforma.com hit the market at full stride. Last month, the Santa Clara, Calif.-based company announced an initial public offering of 7,000,000 shares at $13 a share. Stock prices immediately soared, and at Modern Physician press time were trading at $52 a share.
HMO AUDIT. Minnesota's attorney general will audit HMOs in order to learn the health plans' "true administrative costs."
Attorney General Mike Hatch says he's concerned about healthcare premiums that are rising 20 percent each year. "No other sector in the Minnesota economy is experiencing inflation at this level," state Sen. Linda Berglin told the Minneapolis Star Tribune.
Hatch previously filed suit against HCFA for disparate Medicare payments. In the suit filed late last year, Hatch claims it is illegal to pay Medicare claims at differing rates for different geographic areas (see January, page 3).
Minnesota HMOs have administrative costs of about 11%, according to the Minnesota Council of Health Plans.
AMA UNION DEBUT. The American Medical Association's foray into organized labor is coming to Detroit. The AMA's Physicians for Responsible Negotiation has filed a petition with the National Labor Relations Board to represent employed physicians at Detroit's Wellness Plan, a mixed-model HMO that operates four clinics.
The not-for-profit, minority-run Wellness Plan grew out of Detroit's 1968 riots and has been providing healthcare to inner-city Detroit residents ever since.
The majority of the clinic's patients are Medicaid patients, and recent reductions in Medicaid payments hit the clinic hard, resulting in staff layoffs.
According to Ross Rubin, PRN's acting executive director, the physicians feel they have been alienated, have not been able to help the clinic respond to the cuts and have been without a contract for a year and a half. PRN's request to represent 27 of the clinic's physicians was heard before a regional NLRB panel last month, and a decision is expected by Feb. 11, Rubin says.